A key feature of convertible term insurance is that it allows the insured to:
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Convertible term insurance grants the insured the right to convert the term coverage to a permanent policy (such as whole life) during a specified conversion period or up to a specified age, without submitting new evidence of insurability. This means the insured can lock in permanent protection even if health has deteriorated, because the insurer cannot require a new medical exam or reject the conversion. The premium for the new permanent policy is based on the insured's attained age at conversion. This convertibility feature makes term coverage valuable as temporary protection with a future permanent option.
Why the other options are wrong
- B) Renewal premiums increase with each renewal because they are based on attained age; convertibility does not freeze term rates.
- C) Conversion changes the policy type to permanent coverage, not to a larger term policy, and it is only available within the conversion window.
- D) Premium refunds on lapse relate to return-of-premium features, not to convertibility.
Memory hook
Convertible = change ticket to permanent without a health re-check. Lock in insurability before it walks away.