What is a Convertible Term Life Insurance Policy?

Term life contracts are guaranteed for the full period you choose. The conversion is just an added feature that you may or may not take advantage of. Most insureds decide to take advantage of this valuable feature by the end of the conversion period depending on one's health at that time. Conversion is generally utilized only if your health takes a turn for the worse for the most part. It is the right of a policyholder to convert without a physical examination to furnish evidence of insurability. Many term life insurance policies can be converted to a permanent (universal or whole life) policy at the insured's attained age, with no physical examination required. Essentially, conversion locks in your health from the initial underwriting approval of your policy until the end of the conversion period. Most polices are covertible to age 65 or 70 and it varies from insurance company to company.

Again, it is a very valuable feature if your health has diminished since the onset of the policy.

Alternatively, your convertible term life policy is a hidden asset as there are institutional buyers that invest in these policies. The general market is age 65 plus.