Temporary life insurance coverage purchased for a specified number of years (i.e. 1, 5, 10, 20, 30, etc.) which can be converted to a permanent life insurance policy at some point during the level premium paying period of the policy.
Some convertible term policies limit the conversion to the first few years of the policy, while others allow conversion throughout the entire level premium paying period. Regardless, conversion to a permanent policy is guaranteed and does not require additional underwriting. This means an insured could convert his term policy to a whole life or universal life policy, even if a current health condition would otherwise prevent him from buying a new policy. Convertible term insurance preserves the insured’s insurability, acting as an option to buy permanent insurance at some future date.
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