Life Insurance Policies, Provisions, Options and Riders Practice Test

Question: 1 / 400

What does "convertible term" mean in life insurance?

It allows conversion into a higher premium plan

It enables conversion to a permanent policy without further medical underwriting

"Convertible term" refers to a feature of certain term life insurance policies that allows policyholders to convert their term insurance into a permanent life insurance policy without the need for additional medical underwriting. This option is beneficial for policyholders who may develop health issues during the term period that could make obtaining new insurance difficult or more expensive. By allowing conversion to a permanent policy, the insured holds the security of maintaining coverage even as their health status may change. This feature is particularly attractive to individuals who wish to keep their insurance but want the lifelong coverage and cash value that come with permanent policies.

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It provides options only for short-term coverage

It is a policy that converts premiums into investments

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