Question 46

The policy will terminate unless converted or renewed at age 60.

At age 60, the 20-year level term policy will reach its expiration and will terminate unless the insured takes action to convert the policy to a different type or renew it.

A) Automatically renew

This option is incorrect because level term policies do not automatically renew at the end of the term. Renewal typically requires the policyholder to apply for a new policy, often at a higher premium based on the insured's current age and health status.

B) Convert to whole life

This option is partially correct in that many term policies offer a conversion feature, but it is not guaranteed. The insured must actively choose to convert the policy before it expires, and without this action, the policy will not convert automatically.

C) Terminate unless converted or renewed

This is the correct answer. Once the 20-year term expires at age 60, the policy will terminate unless the insured has either converted it to a whole life policy or renewed it under the terms set forth in the policy agreement.

D) Become paid-up term

This option is incorrect as level term policies do not become paid-up term policies. Once the term expires, the policy simply terminates; it does not maintain any coverage without renewal or conversion.

Conclusion

The policy will indeed terminate at age 60 unless the insured takes steps to convert it or renew it, making option C the definitive answer. Other options either misrepresent the nature of term policies or inaccurately describe the outcomes at the end of the policy term.