Life insurance replacements can be defined as which of the following?

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Study for the Louisiana Series 103 – Life, Health, and Accident or Sickness Insurance Exam. Familiarize yourself with key concepts through engaging questions and explanations. Prepare effectively for your exam!

Multiple Choice

Life insurance replacements can be defined as which of the following?

Explanation:
Replacement means swapping out an existing life policy for a new one. When you replace, the old policy is terminated (or surrendered) and a new contract is issued, possibly with different terms, benefits, or a different insurer. This exactly describes exchanging an existing life policy for a new policy. Adding riders changes the current policy rather than replacing it. Renewing for another term is a continuation of the same contract, not substituting it. Purchasing a second policy creates a separate policy in addition to the first, not a replacement of it.

Replacement means swapping out an existing life policy for a new one. When you replace, the old policy is terminated (or surrendered) and a new contract is issued, possibly with different terms, benefits, or a different insurer. This exactly describes exchanging an existing life policy for a new policy.

Adding riders changes the current policy rather than replacing it. Renewing for another term is a continuation of the same contract, not substituting it. Purchasing a second policy creates a separate policy in addition to the first, not a replacement of it.

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