Tennessee Insurance Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the Tennessee Insurance Exam with engaging quizzes featuring detailed flashcards, multiple-choice questions, hints, and explanations, ensuring readiness for test day.

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What type of life insurance begins as temporary but can be modified to permanent?

Universal Life
Whole Life
Convertible Term
Decreasing Term

The correct answer is: Convertible Term

Convertible Term insurance is designed to begin as a temporary coverage, typically with a specified term such as 10, 20, or 30 years. The defining feature of this type of insurance is the ability to convert it into a permanent policy, such as whole life or universal life insurance, without the need for the insured to provide evidence of insurability. This means that during or at the end of the term, the policyholder can choose to make the transition to permanent coverage, securing lifelong insurance that also accumulates cash value. This flexibility is particularly advantageous for those who may initially require temporary coverage for specific financial obligations, such as a mortgage or children's education, but who may later wish for the added benefits of a permanent policy. The conversion option provides peace of mind, recognizing that needs can change in the future, allowing policyholders to adjust their coverage accordingly. In summary, the distinctive characteristic of Convertible Term is its temporality combined with the opportunity to convert to a permanent solution, which makes it uniquely beneficial in planning for long-term insurance needs.