A Complete Guide About Convertible Term Life Insurance

Life Insurance

A convertible insurance policy is the one that can be converted into a permanent policy by the owner at a later date. As long as the payments are done on time and the conditions are maintained, the insured individual does not have to go through any screening whilst the policy is being converted. However, there are life insurance companies that provide clients with their requirements which should be met before transferring the convertible term life insurance into a long-lasting plan. The companies often set their limits on their client’s current age, health and policy term.

What are the features of this plan?

Conversion options

Interestingly, this convertible plan comes with an option that allows switching the plan to an endowment assurance scheme. Whilst some convertible plans allow switching as an extra feature, some plans are bestowed with in-built conversion schemes. Want to add this? Just pay an additional premium!

Conversion on demands

Remember no company exercises convertible term life insurance plans automatically. Whether the scheme has an in-built option or add-on feature, changing the plan is only possible if the insurance holder requests the insurance company for the same. Now, what happens if he or she fails to make a conversion request? The plan is considered as a term life insurance policy that gets terminated either on maturity or on the death of the policyholder.


Factors like sum, age, the term of the policy and premium paying options calculate the premiums. During the inception, premiums are determined and cannot be changed later on. These premiums do not get affected even when the owner chooses a conversion plan.

Payable benefits

The policyholder receives the death benefit when the conversion scheme is a term life insurance policy. If the plan is transferred to an endowment assurance policy, a maturity benefit is needed besides a death benefit.

Sum assured

These insurance plans have limited sum assured. As in the later years, these plans are switched to an endowment scheme, an unlimited sum is not permitted.

How beneficial is it?

Wondering if this plan is beneficial or not? Well, the good news is, it is! When you think of purchasing insurance, a lot of questions run through your mind like, whether to select life term coverage or what are the maturity benefits or should you change to an endowment policy. This is where the convertible term life insurance scheme comes in handy. It combines endowment assurance and term insurance plans, enabling a policyholder with maximum conversion options. Whilst the former plan guarantees savings and maturity benefit, the latter promises optimal coverage, letting you enjoy dual benefits from a single scheme. With cheaper premiums, you get a good maturity benefit in return. Moreover, you can also continue it as a term plan and convert the plan to get an amount of maturity in the near future. However, as there are limited plans available, the choices are limited.

Now when you know what a convertible policy is, go to a reputable insurance company and opt for this beneficial opportunity. Talk to the professionals so that you can make a wise decision.