Life Insurance FundamentalsQuestion 124 of 716
What is the main advantage of the convertible feature in a term life policy?
a.The policyowner receives every premium paid back in cash at the end of the term, entirely tax-free
b.The premium automatically decreases each year as the insured ages, while the death benefit stays level
c.The death benefit automatically increases with inflation at no additional premium cost
d.The policyowner may exchange the term policy for a permanent policy without proof of insurability
Explanation
Convertibility lets the policyowner exchange the term contract for permanent insurance (typically whole life or universal life) without a medical exam or new evidence of insurability. This protects an insured whose health has worsened.
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PrepPass team · Verified against California Life & Health Insurance License Exam · How we review
Reviewed by John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — verify)