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SLII Agent Exam study materials
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SLII Agent Exam practice questions

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Question 1Insurance Fundamentals and Principles

An applicant completes a life insurance application and pays the initial premium, and the insurer issues the policy exactly as applied for. Under the principle of offer and acceptance, when does the insurance contract typically become legally binding?

  1. When the applicant signs the application
  2. When the insurer delivers the policy and the first premium is paid Correct answer.
  3. When the medical examination is scheduled
  4. When the producer submits the application to the insurer

Explanation

The applicant's application is the offer, and the insurer's issuance of the policy as applied for is the acceptance. The contract generally becomes effective only when the policy is delivered and the required initial premium is paid, because delivery and payment complete the consideration exchange.

Question 2Insurance Fundamentals and Principles

A policyowner intentionally withholds a material fact about a prior illness on an application. The insurer later discovers this and seeks to void the contract. Which legal characteristic of insurance contracts most directly supports the insurer's position?

  1. The contract is a contract of adhesion
  2. The contract is unilateral
  3. The contract is conditional
  4. The contract is one of utmost good faith Correct answer.

Explanation

Insurance is a contract of utmost good faith, which requires both parties to disclose material facts honestly. Intentional concealment of a material fact breaches that duty and can allow the insurer to rescind the contract.

Question 3Insurance Fundamentals and Principles

Which element must be present for a risk to be considered insurable by a commercial insurer?

  1. The loss must be accidental and measurable in financial terms Correct answer.
  2. The loss must be catastrophic to the entire community at once
  3. The loss must be intentional on the part of the insured
  4. The loss must be certain to occur for every insured

Explanation

Insurable risks are typically accidental, measurable, and definite as to time, place, and amount. Intentional losses and certain losses are generally excluded because insurance transfers uncertain chance losses, not planned events.

Question 4Insurance Fundamentals and Principles

A homeowner deliberately burns down a shed to collect insurance money. The insurer denies the claim. Which principle most directly justifies the denial?

  1. Utmost good faith Correct answer.
  2. Indemnity
  3. Subrogation
  4. Insurable interest

Explanation

Utmost good faith requires honesty and fair dealing and prohibits the insured from intentionally causing a loss to collect benefits. Deliberate destruction is a breach of that duty and also falls outside the scope of fortuitous coverage.

Question 5Insurance Fundamentals and Principles

A business owner takes out property insurance and later sells the building but keeps the policy. The insurer may deny a subsequent claim because which requirement is no longer satisfied?

  1. Representation
  2. Insurable interest Correct answer.
  3. Warranty
  4. Subrogation

Explanation

Insurable interest requires the insured to suffer a financial loss if the insured property is damaged. Once the building is sold, the former owner no longer has that financial stake and the policy no longer protects the property.

Question 6Insurance Fundamentals and Principles

Which situation best illustrates the principle of indemnity in operation?

  1. A policyholder receives a fixed benefit regardless of the actual loss amount
  2. A policyholder receives a payment equal to the policy limit even when the loss is smaller
  3. A policyholder receives a settlement limited to the actual financial loss suffered Correct answer.
  4. A policyholder collects from two insurers and profits from the loss

Explanation

Indemnity means the insured is restored to approximately the same financial position as before the loss, no better and no worse. Payment is therefore limited to the actual loss, subject to policy limits and deductibles.

Question 7Insurance Fundamentals and Principles

After paying an insured's collision claim, an insurer sues the at-fault driver who caused the damage. This right is known as:

  1. Salvage
  2. Subrogation Correct answer.
  3. Contribution
  4. Coinsurance

Explanation

Subrogation allows the insurer, after paying a covered loss, to step into the insured's legal position and pursue the party responsible. It supports indemnity by preventing the insured from recovering twice and by shifting cost to the at-fault party.

Question 8Insurance Fundamentals and Principles

An insured's policy contains a provision requiring the insured to submit proof of loss within 60 days of a loss. Failure to do so may allow the insurer to deny the claim because the provision is a:

  1. Waiver of coverage
  2. Condition precedent to recovery Correct answer.
  3. Representation of fact
  4. Warranty of fact

Explanation

A condition precedent is an act the insured must perform before the insurer's obligation to pay arises. Timely proof of loss is a common condition precedent, and failing to satisfy it can bar recovery.

Question 9Insurance Fundamentals and Principles

Which term describes the transfer of the financial consequences of risk from an individual to an insurer in exchange for a premium?

  1. Risk avoidance
  2. Risk reduction
  3. Risk transfer Correct answer.
  4. Risk retention

Explanation

Insurance is a risk transfer mechanism: the insured pays a premium and the insurer assumes the financial consequences of covered losses. The other techniques either keep the risk or lessen its likelihood or severity without transferring it.

Question 10Insurance Fundamentals and Principles

A driver installs an anti-theft device and a home sprinkler system. These actions primarily represent which risk management technique?

  1. Risk retention
  2. Risk avoidance
  3. Risk transfer
  4. Loss control Correct answer.

Explanation

Loss control reduces either the probability or the severity of a loss without changing who bears the risk. Anti-theft devices and sprinklers lower the chance or extent of damage, so they are loss-control measures.

Question 11Insurance Fundamentals and Principles

Which type of risk is generally insurable because it involves only the chance of loss with no possibility of gain?

  1. Market risk
  2. Pure risk Correct answer.
  3. Investment risk
  4. Speculative risk

Explanation

Pure risk presents only the possibility of loss or no loss, with no chance of profit, and is therefore insurable. Speculative risk involves the possibility of gain as well as loss and is generally not insurable.

Question 12Insurance Fundamentals and Principles

An insured has a $10,000 deductible and suffers a $25,000 covered loss. Under a policy that pays the amount above the deductible, what does the insured collect?

  1. $0
  2. $15,000 Correct answer.
  3. $25,000
  4. $10,000

Explanation

A deductible is the amount the insured retains before the insurer pays. Subtracting the $10,000 deductible from the $25,000 covered loss leaves $15,000 payable, assuming no other limits or provisions apply.

Question 13Insurance Fundamentals and Principles

Which factor most directly influences the premium an insurer charges for a given risk?

  1. The expected frequency and severity of losses Correct answer.
  2. The number of agents in the territory
  3. The insurer's advertising budget
  4. The producer's commission rate

Explanation

Premiums are based on the expected cost of losses plus expenses and a margin for profit and contingencies. The greater the anticipated frequency and severity of claims, the higher the premium the insurer must charge.

Question 14Insurance Fundamentals and Principles

The amount a policy will pay for a covered loss, stated in the declarations, is referred to as the:

  1. Deductible
  2. Coinsurance penalty
  3. Limit of liability Correct answer.
  4. Premium

Explanation

The limit of liability is the maximum amount the insurer will pay for a covered loss under the policy. It caps the insurer's obligation and appears in the declarations along with other policy-specific terms.

Question 15Insurance Fundamentals and Principles

A property policy includes an 80% coinsurance clause. The building is valued at $500,000, but the insured carries only $300,000. A $100,000 covered loss occurs. What amount will the insurer pay under the coinsurance formula, assuming no deductible?

  1. $100,000
  2. $48,000
  3. $60,000
  4. $75,000 Correct answer.

Explanation

The coinsurance formula is (carried insurance ÷ required insurance) × loss. Required insurance is 80% of $500,000, or $400,000, so ($300,000 ÷ $400,000) × $100,000 = $75,000. The insured bears the remaining $25,000 as a coinsurance penalty.

Question 16Insurance Fundamentals and Principles

Which legal doctrine holds that ambiguous language in an insurance policy is interpreted in favor of the insured rather than the insurer?

  1. Contra proferentem Correct answer.
  2. Res ipsa loquitur
  3. Caveat emptor
  4. Stare decisis

Explanation

Contra proferentem means ambiguous terms are construed against the party who drafted them, which is typically the insurer. Because insurance is a contract of adhesion, the insured has little bargaining power, so courts resolve genuine ambiguity in the insured's favor.

Question 17Insurance Fundamentals and Principles

An insured fails to disclose a material fact during the application process, and the insurer later discovers it. Which remedy is generally available to the insurer for such a material misrepresentation?

  1. The insurer may only increase the premium retroactively
  2. The insurer may rescind the policy and deny coverage Correct answer.
  3. The insurer must pay all claims regardless of the misrepresentation
  4. The insurer must refer the matter to a state regulator for action

Explanation

A material misrepresentation allows the insurer to rescind the contract or deny a related claim because the insurer relied on inaccurate information in issuing coverage. Whether the misrepresentation must be intentional varies by state and by the type of insurance.

Question 18Insurance Fundamentals and Principles

Which statement best describes a warranty in an insurance contract?

  1. An oral promise made by the producer to the applicant
  2. A promise by the insurer to renew the policy
  3. A statement believed to be true to the best of the insured's knowledge
  4. A statement that must be literally true for coverage to apply Correct answer.

Explanation

A warranty is a statement or condition in the policy that the insured guarantees to be true. Historically, breach of a warranty could void coverage even if the statement was immaterial, though many jurisdictions now require materiality.

Question 19Insurance Fundamentals and Principles

An insured's policy is canceled for nonpayment of premium. Which term describes the return of the unused portion of the premium to the insured?

  1. Salvage
  2. Pro rata refund Correct answer.
  3. Coinsurance
  4. Deductible

Explanation

A pro rata refund returns the portion of premium that corresponds to the unexpired term of the policy. It is calculated by dividing the unused time by the total policy period and applying that fraction to the premium paid.

Question 20Insurance Fundamentals and Principles

A liability policy pays on behalf of an insured who is legally obligated to pay damages to a third party. This coverage is best described as:

  1. Property coverage
  2. Third-party coverage Correct answer.
  3. Valued coverage
  4. First-party coverage

Explanation

Liability insurance is third-party coverage because it protects the insured against claims brought by others. First-party coverage, in contrast, pays the insured directly for the insured's own loss.

Question 21Insurance Fundamentals and Principles

An insured has two policies covering the same property for the same interest, and both contain other-insurance clauses. The insurers share the loss under which principle?

  1. Indemnity
  2. Subrogation
  3. Contribution Correct answer.
  4. Coinsurance

Explanation

Contribution is the right of an insurer that has paid more than its share to recover from other insurers covering the same loss. It prevents the insured from collecting twice and ensures each insurer bears its proportionate share.

Question 22Insurance Fundamentals and Principles

Which provision gives the insurer the right to inspect the insured property and examine the insured's books and records?

  1. The assignment clause
  2. The liberalization clause
  3. The subrogation clause
  4. The inspection and audit provision Correct answer.

Explanation

The inspection and audit provision allows the insurer to examine the insured's premises and records to verify exposures and premium basis. It also helps the insurer evaluate risk and confirm the information used to underwrite the policy.

Question 23Insurance Fundamentals and Principles

An insurer uses a policy form that has been broadened by a later edition during the policy period. A provision stating that the broadened coverage automatically applies to existing policies is called the:

  1. Liberalization clause Correct answer.
  2. Coinsurance clause
  3. Appraisal clause
  4. Subrogation clause

Explanation

The liberalization clause automatically extends any broadened coverage the insurer adopts during the policy period to existing policies at no additional premium. It avoids penalizing insureds whose policies were issued before the improvement.

Question 24Insurance Fundamentals and Principles

A policyowner dies and the insurer pays the death benefit to the named beneficiary. Which characteristic of life insurance is illustrated by the fact that the beneficiary receives a stated amount regardless of the insured's actual financial loss?

  1. Indemnity
  2. Coinsurance
  3. Valued contract Correct answer.
  4. Subrogation

Explanation

Life insurance is generally treated as a valued contract because the insurer pays a stated face amount rather than reimbursing a measured loss. Human life has no precise financial value, so the policy amount is agreed in advance.

Question 25Insurance Fundamentals and Principles

Which of the following best describes the role of the deductible in a property insurance policy?

  1. It requires the insured to bear a portion of each loss Correct answer.
  2. It sets the maximum amount payable under the policy
  3. It eliminates the insured's need for loss control
  4. It increases the amount the insurer pays on each claim

Explanation

A deductible is the amount the insured must absorb before the insurer pays, so the insured shares in each loss. Deductibles reduce small claims, lower premiums, and encourage the insured to manage risk responsibly.

Question 26Insurance Fundamentals and Principles

Which element of an insurance contract is defined as something of value exchanged by both parties, such as the premium paid by the insured and the promise to pay claims made by the insurer?

  1. Offer and acceptance
  2. Competent parties
  3. Legal purpose
  4. Consideration Correct answer.

Explanation

Consideration is the value each party brings to the contract: the insured's premium and representations, and the insurer's promise to pay covered losses. Without consideration on both sides, the agreement is not an enforceable insurance contract.

Question 27Insurance Fundamentals and Principles

An applicant completes an application, pays the first premium, and the insurer issues the policy. In which part of the policy would the insured find the insurer's promise to pay covered losses?

  1. The insuring agreement Correct answer.
  2. The declarations
  3. The exclusions
  4. The conditions

Explanation

The insuring agreement contains the insurer's core promise to pay for covered losses in exchange for the premium. The declarations identify the parties and limits, conditions set duties of both parties, and exclusions remove coverage.

Question 28Insurance Fundamentals and Principles

An insured owns a policy that pays covered losses regardless of fault, and the insurer may then pursue the responsible party. This policy feature is best described as which type of coverage?

  1. First-party coverage Correct answer.
  2. Surplus lines coverage
  3. Reinsurance coverage
  4. Third-party liability coverage

Explanation

First-party coverage pays the insured for the insured's own loss, such as damage to the insured's property or injury to the insured. The insurer's later recovery from the at-fault party is subrogation, which follows the first-party payment.

Question 29Insurance Fundamentals and Principles

Which characteristic of insurance means that the insured's loss is measured against the insured's actual financial loss, so that recovery does not create a profit?

  1. Indemnity Correct answer.
  2. Aleatory
  3. Utmost good faith
  4. Adhesion

Explanation

Indemnity means the insured is restored to approximately the pre-loss financial position, no better and no worse. Other contract characteristics describe the parties' duties or the unequal exchange, not the measurement of loss.

Question 30Insurance Fundamentals and Principles

An insurer sells a policy that states coverage applies to "accidental direct physical loss" to the described building. A windstorm tears off part of the roof. Which policy component determines that windstorm damage is covered?

  1. The declarations, because they list the building address
  2. The conditions, because they require prompt notice
  3. The insuring agreement, because windstorm is accidental direct physical loss Correct answer.
  4. The exclusions, because windstorm is not listed

Explanation

The insuring agreement defines the scope of covered peril, and accidental direct physical loss includes windstorm damage unless an exclusion removes it. The declarations merely identify the risk, conditions impose duties, and exclusions would have to specifically remove windstorm.

Question 31Insurance Fundamentals and Principles

An insured's policy contains an exclusion for "intentional loss." The insured deliberately sets fire to the insured building to collect insurance money. How does the exclusion apply?

  1. The insurer may deny the claim because the loss was intentionally caused by the insured Correct answer.
  2. The insurer must pay but may later recover the amount from the insured
  3. The insurer must pay because fire is a covered peril
  4. The insurer must pay because the policy does not name arson specifically

Explanation

An intentional-loss exclusion removes coverage when the insured deliberately causes the loss, because indemnity does not protect a person from the consequences of their own intentional act. The fire peril being covered does not override the exclusion.

Question 32Insurance Fundamentals and Principles

An insured's policy has a limit of $300,000 per occurrence for liability. The insured causes a single accident injuring three people, with total damages of $450,000. How does the per-occurrence limit apply?

  1. The insurer pays $900,000 because the limit applies to each injured person
  2. The insurer pays nothing because the damages exceed the limit
  3. The insurer pays $300,000, and the insured is responsible for the remaining $150,000 Correct answer.
  4. The insurer pays $450,000 because the limit applies to the accident total

Explanation

A per-occurrence limit caps the insurer's payment for all damages arising from one accident at the stated amount. Damages above the limit are the insured's responsibility unless another policy or coverage applies.

Question 33Insurance Fundamentals and Principles

An insured applies for a life policy and dies before the insurer issues the policy, but the applicant had paid the first premium and completed all requirements. Which concept determines whether coverage was in force at death?

  1. Extended reporting provision
  2. Coinsurance clause
  3. Subrogation clause
  4. Conditional receipt Correct answer.

Explanation

A conditional receipt provides temporary coverage from the date of application or medical examination, provided the applicant was insurable under the insurer's rules. It answers whether coverage existed before the policy was formally issued.

Question 34Insurance Fundamentals and Principles

An insured has a policy with a $500 deductible and suffers a covered loss of $2,000. The policy pays the amount above the deductible. How much does the insurer pay?

  1. $2,500
  2. $1,500 Correct answer.
  3. $500
  4. $2,000

Explanation

The deductible is subtracted from the covered loss before the insurer pays, so $2,000 minus $500 equals $1,500. The insured retains the first $500 of the loss.

Question 35Insurance Fundamentals and Principles

Which statement accurately describes the principle of insurable interest as it applies at the time of loss?

  1. The insured must have a financial interest only when the application is signed
  2. The insured must be related by blood or marriage to the beneficiary
  3. The insured must own the property outright with no mortgage
  4. The insured must have a financial interest in the subject matter at the time of loss Correct answer.

Explanation

Insurable interest requires a financial relationship such that the insured benefits from the subject's continued existence and suffers loss from its damage. For property insurance, that interest must exist at the time of loss for indemnity to apply.

Question 36Insurance Fundamentals and Principles

An insured carries a policy that covers "the peril of fire" and a separate endorsement that adds "vandalism." A vandal damages the building without fire. Which principle explains that the endorsement expands coverage beyond the original peril?

  1. The endorsement acts as an exclusion that removes fire coverage
  2. The endorsement waives the insured's duty to report losses
  3. The endorsement broadens the insuring agreement to add a covered peril Correct answer.
  4. The endorsement replaces the declarations page

Explanation

Endorsements amend the policy and can broaden the insuring agreement by adding perils, increasing limits, or extending coverage. Adding vandalism creates coverage for a peril not in the original fire-only form.

Question 37Insurance Fundamentals and Principles

Which doctrine holds that an insurance policy is interpreted against the party who drafted it when its language is ambiguous?

  1. Res ipsa loquitur
  2. Caveat emptor
  3. Contra proferentem Correct answer.
  4. Stare decisis

Explanation

Contra proferentem means ambiguous policy language is construed against the drafter, typically the insurer. Because insurance is a contract of adhesion drafted by the insurer, courts resolve genuine ambiguity in the insured's favor.

Question 38Insurance Fundamentals and Principles

An insured misrepresents a material fact on a property insurance application, and the insurer would not have issued the policy on the same terms had it known the truth. Which contract remedy is available to the insurer?

  1. Rescind the policy and return the premium Correct answer.
  2. Waive the misrepresentation and pay the claim
  3. Enforce the policy but reduce the premium
  4. Reform the policy to increase coverage

Explanation

A material misrepresentation allows the insurer to rescind the contract, returning the parties to their pre-contract positions by refunding premium. The misrepresentation must be material, meaning it affected the insurer's decision to issue coverage or its terms.

Question 39Insurance Fundamentals and Principles

An insured has a property policy with a $200,000 limit and a liability policy with a $300,000 limit. The insured negligently starts a fire that damages the insured's own building ($150,000) and a neighbor's building ($100,000). Which coverage responds to each loss?

  1. Property coverage pays the $150,000 own-building loss; liability coverage pays the $100,000 neighbor's loss Correct answer.
  2. Property coverage pays both losses because the fire started on the insured's property
  3. Liability coverage pays both losses because the insured was negligent
  4. Neither policy pays because the insured caused the loss intentionally

Explanation

Property coverage indemnifies the insured for damage to the insured's own property, while liability coverage pays sums the insured is legally obligated to pay a third party. Negligence causing damage to a neighbor's property falls under liability, not the insured's own property coverage.

Question 40Insurance Fundamentals and Principles

An insurer uses a policy form that has been broadened by a later edition during the policy period. A provision states that if the insurer adopts a broader form, the broader form applies automatically. This provision is best described as which type of clause?

  1. Appraisal clause
  2. Coinsurance clause
  3. Subrogation clause
  4. Liberalization clause Correct answer.

Explanation

A liberalization clause automatically extends broader coverage adopted by the insurer during the policy period without requiring an endorsement or additional premium. It protects the insured from being held to an older, narrower form.

Question 41Life Insurance Practice

Under a typical individual life insurance contract, which party holds the ownership rights such as naming a beneficiary and taking policy loans?

  1. The insured
  2. The policyowner Correct answer.
  3. The insurer
  4. The beneficiary

Explanation

Ownership rights in a life policy belong to the policyowner, who may be different from the insured. The owner controls beneficiary designations, surrenders, and loans, while the insured's role is to be the life measured.

Question 42Life Insurance Practice

A policyowner names her spouse as primary beneficiary and her two adult children as contingent beneficiaries. If the spouse dies before the insured, who receives the death benefit?

  1. The two children Correct answer.
  2. The spouse's estate
  3. The insurer retains the proceeds
  4. The insured's estate

Explanation

A contingent beneficiary receives the proceeds when no primary beneficiary survives the insured. Because the children are living contingent beneficiaries, they take the death benefit directly and no estate probate is required.

Question 43Life Insurance Practice

Which settlement option provides the beneficiary with income for life, with payments guaranteed to continue for a minimum period even if the beneficiary dies early?

  1. Fixed amount
  2. Fixed period
  3. Life income with period certain Correct answer.
  4. Straight life income

Explanation

A life income with period certain option pays for the beneficiary's lifetime and guarantees payments for a stated minimum period. If death occurs within that period, remaining payments go to a secondary payee.

Question 44Life Insurance Practice

An applicant for a life policy answers questions about health and hobbies on the application but the agent notices a material omission. What is the agent's proper course of action?

  1. Ask the applicant to supply the missing information before submission Correct answer.
  2. Complete the answer for the applicant based on assumption
  3. Attach a personal note instead of the missing answer
  4. Submit the application and let the underwriter discover the gap

Explanation

The agent must record accurate and complete answers because the application is the basis of the contract and misrepresentation can void coverage. Supplying or assuming answers would be a falsification of the application.

Question 45Life Insurance Practice

What is the primary purpose of the free-look provision in a life insurance policy?

  1. To let the insurer cancel coverage for misrepresentation
  2. To allow the owner to return the policy for a refund within a stated period Correct answer.
  3. To guarantee a minimum cash value in the first year
  4. To permit the insured to change occupations without penalty

Explanation

The free-look provision gives the policyowner a stated number of days after delivery to examine the contract and return it for a premium refund. It protects consumers from buying coverage they did not intend.

Question 46Life Insurance Practice

After a whole life policy has been in force for several years, the owner stops paying premiums but does not surrender the policy. Which nonforfeiture option keeps the death benefit in force for a limited number of years?

  1. Cash surrender
  2. Extended term insurance Correct answer.
  3. Reduced paid-up insurance
  4. Automatic premium loan

Explanation

Extended term insurance uses the net cash value to buy term coverage for the full face amount for as long as that value will support. Coverage ends when the term period expires, unlike reduced paid-up coverage.

Question 47Life Insurance Practice

How does a policy loan against a whole life contract generally affect the death benefit if the loan and interest remain unpaid at death?

  1. The death benefit is reduced by the outstanding loan and accrued interest Correct answer.
  2. The loan is forgiven and the full face amount is paid
  3. The insurer cancels the policy and returns only premiums
  4. The beneficiary must repay the loan before receiving proceeds

Explanation

A policy loan is an advance against the contract's values, so any unpaid balance and accrued interest are deducted from the death benefit. The beneficiary receives the net amount rather than the full face amount.

Question 48Life Insurance Practice

Which statement accurately describes the incontestability provision in a life insurance policy?

  1. It prevents the insurer from denying a claim for material misrepresentation after the contestable period Correct answer.
  2. It requires the insured to submit to a medical exam every two years
  3. It allows the insurer to raise premiums after the first year without notice
  4. It guarantees the policy will never lapse for nonpayment

Explanation

After the contestable period, typically two years from issue, the insurer generally cannot rescind the policy or deny a claim based on misrepresentation in the application. Fraudulent procurement and nonpayment of premium remain exceptions.

Question 49Life Insurance Practice

An insured under a renewable term policy wants to continue coverage after the initial term without providing new evidence of insurability. Which feature makes this possible?

  1. Convertibility
  2. Renewability Correct answer.
  3. Re-entry provision
  4. Decreasing term feature

Explanation

A renewable term policy allows the insured to continue coverage for successive terms without new underwriting, usually at higher attained-age premiums. Convertibility is a separate right to exchange term coverage for permanent insurance.

Question 50Life Insurance Practice

A 45-year-old insured holds a convertible term policy and wishes to exchange it for whole life coverage. What is the key advantage of exercising the conversion privilege?

  1. The death benefit increases automatically
  2. The new policy is issued without new evidence of insurability Correct answer.
  3. The insurer refunds all term premiums paid
  4. The new policy has no premium obligation

Explanation

Conversion allows the insured to obtain permanent coverage without proving insurability again, which protects those whose health has declined. The premium for the new policy is based on the insured's attained age at conversion.