Convertible life insurance is a policy that allows the insured to change the term policy into a whole or universal policy. The process can be completed without going through the health qualification process again.
When you are young, you would want to have a term plan. But as your family grows, you will also want to have a savings or retirement plan. This implies that the demand for the insurance policy also alters as the requirement changes. But changing the insurance policy from one type to another is difficult unless you own convertible life insurance.
A convertible life insurance policy can be converted into another form of life insurance. After the change, the plan still gives dual benefits and comes with a limited sum assured. Some convertible life insurance policies have in-built conversion options, while others come with the add-on feature.
The conversion option is triggered when the insured places a formal request to the insurance company. If the insured does not place a request, the plan continues as a term life insurance plan only.
Premium under the convertible life insurance is based on age, sum assured, premium paying term, and policy term. Premium is charged at the inception and does not change for the policy term. Therefore, the plan may change, but the premiums remain unaffected.
Komal took a convertible life insurance policy for 15 years. She took the approach when she was 25 years old. The sum assured under the policy was Rs.15 lakhs. After 10 years of the policy, she thought of saving for her child’s education. Komal then applied to the insurance company to convert the life insurance policy to an endowment plan. However, the premium under the policy remains unchanged.
At the end of the policy term, Komal was given a maturity benefit of Rs.15 lakhs.
Buy ₹1 Crore Term Insurance at Just ₹508/month*
Exclusively For Salaried Individuals
4 Plan Options
Life Cover upto 70 years
Optional Accelerated Critical Illness benefit
Inbuilt Terminal Illness Benefit
Life Cover
₹1 crore
Premium:
₹508/month*
ABSLI Salaried Term Plan (UIN:109N141V03) is a non-linked non-participating individual pure risk premium life insurance plan; upon Policyholder’s selection of Plan Option 2 (Life Cover with ROP) this product shall be a non-linked non-participating individual savings life insurance plan.
*LI Age 21, Male, Non Smoker, Option 1: Life Cover, PPT: Regular Pay, SA: ₹ 1 Cr., PT: 10 years, Annual Premium: ₹ 6100/- ( which is ₹ 508.33/month) Premium exclusive of GST. On death, 1 Cr SA is paid and the policy terminates.
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