12. Life insurance companies can be broken into three types of organizations: Stock companies, mutual companies, and fraternal benefit societies. Which of the following statements is most correct? a. Because of low acquisition costs, fraternal benefit societies are the most profitable b. More mutual companies convert to stock companies that vice versa c. Stock companies are not permitted to pay policyowner dividends d. Because of their flexible structure, mutual companies have more ways to raise capital for expanding their operations ANSWER 13. Which of the following term policies would have the lowest premium for the upcoming policy year? All of the policies are on the same person (male age 45) and had a face amount of $100,000 on the issue date, which was exactly four years ago. a. An annual renewable term policy with a conversion privilege b. A five-year term policy c. An annual renewable term policy without a conversion privilege d. A five-year term policy with a face amount that adjusts with increases in the Consumer Price Index ANSWER 14. Which type of risk would have the most impact on the profitability of variable annuity contracts issued with a guaranteed living benefit rider? a. Equity risk b. Interest rate risk c. Mortality risk d. Morbidity risk