Oklahoma Life Producer Practice Exam

A ________ policy goes from term to perm.

1. level

2. convertible

3. renewable

4. annual renewable

The correct answer is: convertible

A convertible policy is designed to transition from term insurance to permanent insurance. This feature allows policyholders the flexibility to convert their term life insurance into a whole life or universal life policy without needing to undergo additional medical underwriting. This provides an invaluable option for individuals who may develop health issues during the term period that could make obtaining new permanent coverage challenging or expensive. This conversion feature is significant because it not only maintains coverage but also adapts to the changing needs of the insured as they progress through different life stages. Consequently, if a person initially opts for a term policy for its lower premiums but later desires the lifelong coverage and cash value accumulation associated with permanent policies, the convertible option provides a seamless transition, securing their insurability and financial planning for the future.