What Is Convertible Term? Definition

Why it matters

Conversion protects people whose health may change. If the insured develops a condition, the right to convert still allows coverage for life at standard rates for the age at conversion. The conversion window and eligible products vary by carrier, and conversion raises the premium because permanent coverage costs more. Buyers should check the conversion deadline before they buy, since it may end before the term does. Agents can compare carriers on this feature.

Source: iii.org

Where we use this term

Related terms

Term Life Insurance: Term life insurance is coverage that lasts for a fixed period, such as 10, 20, or 30 years. It pays a death benefit only if the insured dies during that term. It usually builds no cash value.
Whole Life Insurance: Whole life insurance is permanent coverage that lasts for the insured's entire life as long as premiums are paid. It combines a guaranteed death benefit with a cash value that grows at a rate set by the insurer.
Universal Life Insurance: Universal life insurance is a type of permanent coverage with flexible premiums and an adjustable death benefit. Part of each payment funds the cost of insurance, and the rest goes to a cash value account that earns interest.
Underwriting: Underwriting is the process a carrier uses to review an application, judge the risk, and decide whether to offer coverage and at what price. It looks at health, age, habits, and history.
Premium: A premium is the amount you pay to keep an insurance policy active. You can pay it monthly, quarterly, semiannually, or annually, depending on the carrier.

All 241 terms

Why it matters

Where we use this term

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