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In: Finance

Identify the false statements. I. The ability to use the cashvalue of a life insurance...

Identify the false statements. I. The ability to use the cash value of a life insurance policy to purchase paid-up term insurance is referred to as a non-forfeiture option. II. The premium for $100,000 of 20-year term insurance will be lower than for 5-year term insurance. III. At a certain age, term insurance can no longer be renewed. IV. Term insurance policies can either be participating or non-participating. V. The premium of term-to-100 insurance rises over time. VI. The premiums of creditor term insurance are fixed. a) I, II and III b) II, IV and V c) I, III and IV d) II, IV and V

Solutions

Expert Solution

I. The ability to use the cash value of a life insurance policy to purchase paid-up term insurance is referred to as a non-forfeiture option.(False)

II. The premium for $100,000 of 20-year term insurance will be lower than for 5-year term insurance. (False)

III. At a certain age, term insurance can no longer be renewed. (False)

IV. Term insurance policies can either be participating or non-participating.(True)

V. The premium of term-to-100 insurance rises over time. (True)

VI. The premiums of creditor term insurance are fixed(True)


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