Andrea, owner of Andrea’s Fashions Inc., employs her designer daughter Judy, who will carry on the business after Andrea is gone. Wishing to ensure…

The policy is described as "Term 10 life insurance renewable until age 80." This feature means that while the policy can be renewed every 10 years without new medical evidence, the right to renew and the coverage itself will cease once the life insured (Andrea) reaches the age of 80. The agent has a duty to inform the client about the policy's limitations, and the termination of coverage at a specific age is a critical term of the contract. This ensures Andrea and her business understand the duration of the financial protection.

B. The coverage can be converted to permanent insurance at any time. This is incorrect because the policy is explicitly defined as "non-convertible," which means it lacks the feature to be exchanged for a permanent insurance policy.
C. The coverage can only be renewed once. This is incorrect. A Term 10 policy taken at age 50 and renewable to age 80 can be renewed at age 60 and again at age 70.
D. The coverage will pay a benefit to Judy upon Andrea's death. This is incorrect because the question states the business, Andrea’s Fashions Inc., is the beneficiary. The death benefit is payable to the named beneficiary only.

1. IFSE Institute, Life Insurance (LLQP) – Module 4: Term Life Insurance, Section 2.1 "Renewability". This section explains that renewable term policies specify a maximum age beyond which the policy cannot be renewed. For a policy "renewable until age 80," coverage terminates at the policy anniversary nearest the insured's 80th birthday.

2. IFSE Institute, Life Insurance (LLQP) – Module 4: Term Life Insurance, Section 2.2 "Convertibility". This section defines the conversion feature and clarifies that policies sold without this rider are "non-convertible," meaning they cannot be exchanged for a permanent policy.

3. IFSE Institute, Life Insurance (LLQP) – Module 2: The Life Insurance Policy, Section 3.3 "The Beneficiary". This section details that the death benefit proceeds are paid directly to the beneficiary named in the policy contract. In this case, the beneficiary is the corporation, not an individual family member.