Tennessee Insurance Practice Exam

During which period can Term Life policies be converted to permanent coverage?

1. A specified time period according to the contract

2. Any time before the insured turns 65

3. Only at the end of the term

4. Only if the policyholder has a terminal illness

The correct answer is: A specified time period according to the contract

Term Life policies typically include a provision that allows policyholders to convert their term coverage into permanent insurance. This conversion is usually subject to specific terms outlined in the policy contract. A specified time period for such a conversion is often designated, which can vary based on the insurer's guidelines and the type of term policy purchased. This provision provides flexibility for individuals seeking long-term coverage without the need for requalification or medical underwriting. The other options do not accurately capture the relationship between the conversion feature and the terms of the policy. For instance, while some policies may allow conversion before a certain age, such as 65, this is not universally applicable and depends on the individual contract. Additionally, converting only at the end of the term overlooks the specified conversion period that is often part of the policy terms. Lastly, requiring a terminal illness for conversion is not a standard provision, as the conversion option is generally available regardless of health status, provided it's exercised within the contractual timeframe.