Which type of insurance policy commonly allows for conversion to a permanent policy?

A term life insurance policy commonly allows for conversion to a permanent policy. This feature provides policyholders with flexibility if their needs change over time. Term life insurance is typically purchased for a specific period, such as 10 or 20 years, and once that term expires, the coverage ends unless it is converted. The conversion option allows the insured to transition to a permanent life insurance policy, usually without undergoing additional medical underwriting. This can be particularly beneficial if the insured’s health has declined since the original policy was issued, making it difficult to qualify for a new individual permanent policy.

Whole life, universal life, and variable life insurance are considered permanent insurance policies from the outset, designed to provide coverage for the insured’s entire life as long as premiums are paid. They do not necessitate a conversion option since they are permanent products already. Hence, term life insurance distinguishes itself in this context by offering the possibility of conversion, making it an appealing choice for those uncertain about their long-term insurance needs.