LOMA 281 Module 2 Questions with
Complete Solutions
Assume Blythe Owens purchased a convertible term insurance policy instead of a renewable
term policy. During the conversion period, Blythe's health declined to the point where she would
no longer be considered insurable. Can Blythe convert her term policy to a cash value policy?
a. Yes
b. No
c. Can't tell. Need more information. Correct Ans-A.
attained age conversion Correct Ans-A conversion of a term life insurance policy to a cash
value life insurance policy in which the premium rate for the cash value policy is based on the
insured's age at the time the policy is converted. Contrast with original age conversion.
Original age conversion Correct Ans-A conversion of a term life insurance policy to a cash
value life insurance policy in which the premium rate for the cash value policy is based on the
insured's age when the original term life insurance policy was issued. Contrast with attained age
conversion.
antiselection Correct Ans-
,When a term life insurance policy is RENEWED, the amount of coverage under the policy can ...
a. increase
b. decrease
c. remain the same Correct Ans-B & C
When a term life insurance policy is RENEWED, the coverage period can ...
a. increase
b. decrease
c. remain the same Correct Ans-B & C
When a term life insurance policy is RENEWED, the premium rate (for the same amount of
coverage) can ...
a. increase
b. decrease
c. remain the same Correct Ans-A.
When a term life insurance policy is RENEWED, the type of coverage ...
,a. changes
b. remains the same Correct Ans-B.
When a term life insurance policy is CONVERTED, the amount of coverage can ...
a. increase
b. decrease
c. remain the same Correct Ans-B & C
When a term life insurance policy is CONVERTED,the coverage period can ..
a. increase
b. decrease
c. remain the same Correct Ans-A.
When a term life insurance policy is CONVERTED, the premium rate can ...
a. increase
b. decrease
c. remain the same Correct Ans-A.
, When a term life insurance policy is CONVERTED, the type of coverage ....
a. changes
b. remains the same Correct Ans-A.
Carlos mendoza purchased a 250k insurance policy on his life that requires him to pay equal
annual premium payments. If Mr. Mendoza keeps the policy in force by paying the annual
renewal premiums, and if he dies anytime within 20 years after purchasing the policy, then the
policy will provide a 250k death benefit. The policy provides no coverage beyond the 20 - year
period, and Mr. Mendoza will not receive anything if he lives to the end of the policy term. This
information indicates that the type of insurance policy Mr. Mendoza owns is
a. an increasing term life insurance policy
b. a level term life insurance policy
c. a decreasing term life insurance policy
d. an attained age conversion term life insurance policy Correct Ans-B.
Dolly Varden purchased a new home and obtained a 30-year mortgage loan from the sanguine
bank. To insure her mortgage loan. Dolly purchased from the Valiant Insurance Company a
mortgage insurance policy that named her husband, William, as the beneficiary. The following
statements are about this situation select the answer choice containing the correct statement.
Complete Solutions
Assume Blythe Owens purchased a convertible term insurance policy instead of a renewable
term policy. During the conversion period, Blythe's health declined to the point where she would
no longer be considered insurable. Can Blythe convert her term policy to a cash value policy?
a. Yes
b. No
c. Can't tell. Need more information. Correct Ans-A.
attained age conversion Correct Ans-A conversion of a term life insurance policy to a cash
value life insurance policy in which the premium rate for the cash value policy is based on the
insured's age at the time the policy is converted. Contrast with original age conversion.
Original age conversion Correct Ans-A conversion of a term life insurance policy to a cash
value life insurance policy in which the premium rate for the cash value policy is based on the
insured's age when the original term life insurance policy was issued. Contrast with attained age
conversion.
antiselection Correct Ans-
,When a term life insurance policy is RENEWED, the amount of coverage under the policy can ...
a. increase
b. decrease
c. remain the same Correct Ans-B & C
When a term life insurance policy is RENEWED, the coverage period can ...
a. increase
b. decrease
c. remain the same Correct Ans-B & C
When a term life insurance policy is RENEWED, the premium rate (for the same amount of
coverage) can ...
a. increase
b. decrease
c. remain the same Correct Ans-A.
When a term life insurance policy is RENEWED, the type of coverage ...
,a. changes
b. remains the same Correct Ans-B.
When a term life insurance policy is CONVERTED, the amount of coverage can ...
a. increase
b. decrease
c. remain the same Correct Ans-B & C
When a term life insurance policy is CONVERTED,the coverage period can ..
a. increase
b. decrease
c. remain the same Correct Ans-A.
When a term life insurance policy is CONVERTED, the premium rate can ...
a. increase
b. decrease
c. remain the same Correct Ans-A.
, When a term life insurance policy is CONVERTED, the type of coverage ....
a. changes
b. remains the same Correct Ans-A.
Carlos mendoza purchased a 250k insurance policy on his life that requires him to pay equal
annual premium payments. If Mr. Mendoza keeps the policy in force by paying the annual
renewal premiums, and if he dies anytime within 20 years after purchasing the policy, then the
policy will provide a 250k death benefit. The policy provides no coverage beyond the 20 - year
period, and Mr. Mendoza will not receive anything if he lives to the end of the policy term. This
information indicates that the type of insurance policy Mr. Mendoza owns is
a. an increasing term life insurance policy
b. a level term life insurance policy
c. a decreasing term life insurance policy
d. an attained age conversion term life insurance policy Correct Ans-B.
Dolly Varden purchased a new home and obtained a 30-year mortgage loan from the sanguine
bank. To insure her mortgage loan. Dolly purchased from the Valiant Insurance Company a
mortgage insurance policy that named her husband, William, as the beneficiary. The following
statements are about this situation select the answer choice containing the correct statement.
