Question

What is the purpose of the conversion option in a deferred pension plan?

a.

To change the ownership of the policy

b.

To alter the nominee of the policy

c.

To convert the lump sum into an annuity or vice versa

d.

To increase the sum assured

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (c).To convert the lump sum into an annuity or vice versa Explanation:The conversion option in a deferred pension plan allows policyholders to convert the lump sum into an annuity or vice versa, providing flexibility in retirement planning.

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Q. What is the purpose of the conversion option in a deferred pension plan?
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