Future Business Leaders of America (FBLA) Business Calculations Practice Test

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Dive into the FBLA Business Calculations Test. Sharpen your analytical skills with multiple-choice questions and gain insights with detailed explanations. Excel in your exams!

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What does it mean when an insurance policy lapses?

It has doubled in value
It has renewed
It has added options
It has terminated

The correct answer is: It has terminated

When an insurance policy lapses, it means that the policy has terminated due to non-payment of premiums or failure to meet other requirements outlined by the insurance provider. This can occur when the policyholder does not pay their insurance premiums by the due date or fails to comply with other contractual obligations, leading to the cancellation of coverage. A lapsed policy means that the policyholder no longer has the protection or benefits that the insurance was supposed to provide. In contrast, the other options specify conditions that do not accurately describe a lapsed policy. For instance, doubling in value, renewing, or adding options imply that the policy is still in effect and providing coverage, which is not the case when a policy lapses. Such terms suggest alterations or enhancements to the policy rather than its termination.