It is most commonly converted to whole of life cover which is a more expensive life insurance policy since it will provide protection for the rest of your life, not just over a set period of time. The premium for the new whole of life policy would be that what is normally due for a healthy person at the age you make the conversion. What’s more, you can convert it at any time during the term of the policy regardless of the state of your health since no further medical evidence will be asked of you.
This flexibility obviously comes at a cost and so the premiums charged for convertible term insurance are always slightly higher than for ordinary level term insurance.
It is generally an option taken up by people who in fact which to purchase whole of life cover, but who simply cannot afford the higher monthly premiums due to financial constraints.
Convertible term insurance provides a compromise for people in that situation. They will have to pay slightly higher premiums than if they had ordinary level cover, but the policyholder can be reassured that the plan can be altered to their benefit at a later stage should their circumstances improve.
As with all types of life insurance you can also have additional benefits such as critical illness cover and waiver of premium benefit.
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