Term Life Policies that have the ability to be converted to permanent coverage may do so during a specific time period. This conversion period:
The Correct Answer Is:
d. varies according to the contract
Correct Answer Explanation
Term life insurance policies that have the ability to be converted to permanent coverage typically come with a specified conversion period.
This conversion period refers to the timeframe during which the policyholder has the option to convert their term life policy into a permanent life policy without having to provide evidence of insurability (i.e., without undergoing a medical examination or answering health-related questions).
The correct answer is option d: “varies according to the contract.”
This is because the conversion period is not standardized across all insurance contracts. Instead, it is determined by the terms and conditions set forth by the individual insurance company in the policy contract.
Different insurance companies may offer different conversion periods, which can range from a few years to the entire term of the policy. Therefore, the specific length of the conversion period is contract-specific and is not controlled by a universal regulatory body like the National Association of Insurance Commissioners (NAIC).
Now, let’s discuss why the other options are not correct: