[Solved] What is the primary benefit of a convertible term insurance policy? — Ans: It allows conversion into a permanent life insurance policy without medical... | Insurance Awareness

Insurance Awareness - Life Insurance - LIC

What is the primary benefit of a convertible term insurance policy?

AIt allows conversion into a permanent life insurance policy without medical examination.

BIt provides maturity benefits at the end of the term.

CIt offers a cash surrender value during the term.

DIt automatically renews with increased sum assured.

Step-by-Step Solution

Step 1: Understand convertible term insurance
Convertible term insurance allows the policyholder to convert the term policy into a permanent life insurance policy, usually without additional medical tests.
Step 2: Evaluate options
It provides maturity benefits at the end of the term. is incorrect as term insurance does not provide maturity benefits. It offers a cash surrender value during the term. is wrong because term insurance lacks surrender value. It automatically renews with increased sum assured. is incorrect as automatic renewal with increased sum assured is not a standard feature.
Final Answer:
It allows conversion into a permanent life insurance policy without medical examination. → Option A
Quick Check:
Convertible term policies provide flexibility, confirming It allows conversion into a permanent life insurance policy without medical examination..

Quick Trick: Convertible term = option to switch to permanent cover.

Common Mistakes:

MISTAKES

Assuming term policies always lack flexibility or benefits like maturity or surrender value.

Master "Life Insurance - LIC" in Insurance Awareness

Start learning the concept with an interactive lesson.

More Insurance Awareness Quizzes

What is the primary benefit of a convertible term insurance policy?