Convertible term life insurance is a policy that provides the insurer with the option of converting a term policy to a permanent one at the conclusion of the term without any penalties or having to undergo a medical exam. This feature is also called a conversion privilege, guaranteed renewable, or guaranteed insurability.
Convertible term life insurance gives its policyholder the option to expand coverage to adapt to their new financial needs or life circumstances. However, it will from then on have higher premiums. Nevertheless, it is beneficial because the policyholder can enjoy the benefits of permanent life insurance at an older age without evidence of insurability.
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