Most individuals classify life cover as term plans and whole life plans. The fact is that there are many more products that are available and checking these out will be advantageous. Moreover, companies allow clients to customize the products to suit their personal requirements. Several life products are not as costly as whole life policies and exclude investment aspects and researching these can be beneficial.
A large variety of life insurance policies can be customized and one of the most popular plans is the convertible plan. These are commonly known as convertible term plans, conversion rider, and convertible term life insurance policies. Below we discuss some important facts and features of these policies.
Features of convertible policies:
- Option to convert to permanent life insurance at the end of expiration of the policy or reaching old age
- Standard clause with no additional charge but rechecking before signing is very important
- You can convert the policy at any time without needing another physical examination or further approval
- Enhancing the coverage at the time of conversion not possible but can reduce the same
- Depending on the insurance company and product, users can either convert to universal life policy or whole life policy
- Alternatives include permanent or renewable terms
Working of the policy:
The conversion rider clause is included as an add-on with your term life insurance policy. Without needing the proof of insurability, users have the option of converting their policy to permanent coverage. However, you need to use this option before you reach a certain age or before the term runs out. This age is generally between sixty-five and seventy-five and varies according to the company and product.
When you choose the conversion rider clause, you are guaranteed instant approval for the insurance coverage. This is true even if you are suffering from any serious disease or ailment at the time of conversion. The company will offer you the coverage after making the necessary adjustment to the revised age. In other words, you continue qualifying the similar health ratings that you received when you first acquired the policy.
Types of permanent coverage while conversion:
This primarily depends on the options that are provided by your insurance carrier when converting or according to the clauses signed in the original document. At the time of purchasing this kind of insurance policy, you need to check with the agent about all the product features and offers. There are two types of conversion policies, which include whole life and guaranteed universal life insurance. This is one of the best options for people who do not have the financial availability to pay a higher premium on a permanent policy to protect their responsibilities. One of the biggest advantages of this conversion rider is that it is available free of cost. Go ahead and check it out today.
About HDFC Life
HDFC Life, one of India’s leading private life insurance companies promoted by HDFC Ltd. & Standard Life Ltd., offers a range of individual and group insurance solutions.
