What is a key benefit of a convertible term policy?

A convertible term policy is designed to offer the policyholder flexibility and security as their life circumstances change. The key benefit of this type of policy is that it allows the individual to convert their term coverage into a permanent life insurance policy without the need for evidence of insurability. This means that the policyholder can transition to a lifelong coverage option regardless of their current health status, which may have deteriorated since the original purchase of the term policy.

This feature is particularly valuable for those who may develop health issues that could make obtaining a new permanent policy more difficult or expensive in the future. By locking in the ability to convert, policyholders gain peace of mind and the opportunity to secure lifelong protection as their insurance needs evolve.

In contrast to the other options: While higher face amounts can be obtained through certain policies, they are not an exclusive feature of convertible term policies. Lifelong coverage without conversion is misleading, as the primary purpose of a convertible term policy is indeed to enable such a conversion. Additionally, premiums are not guaranteed to be lower throughout the policy term; they generally increase over time with age and can differ between term and permanent coverage.