Description

When you are young, having a term plan is common. However, as your family expands, the need for a savings or retirement plan arises. This indicates that the demand for an insurance policy changes with evolving requirements. Transitioning from one type of insurance policy to another can be challenging unless you possess convertible life insurance.

Convertible life insurance allows you to convert it into a different form of life insurance. Even after conversion, the plan continues to offer dual benefits with a limited sum assured. Some policies have built-in conversion options, while others offer it as an add-on feature.

The conversion feature is activated when the policyholder formally requests the insurance company. Without this request, the plan remains as a term life insurance policy only. Premiums for convertible life insurance are determined by factors like age, sum assured, premium paying term, and policy term. These premiums are fixed at the beginning and remain constant throughout the policy term, even if the plan is converted.

For instance, Komal obtained a convertible life insurance policy for 15 years at the age of 25 with a sum assured of Rs. 15 lakhs. After 10 years, she decided to save for her child's education and applied to convert the policy to an endowment plan. Despite the conversion, the premium for the policy remained the same. Upon maturity, Komal received a benefit of Rs. 15 lakhs.