What does 'convertibility' in life insurance policies allow?

'Convertibility' in life insurance policies specifically refers to the option that allows policyholders to change a term life insurance policy into a permanent life insurance policy without undergoing additional underwriting requirements. This feature provides valuable flexibility for the policyholder, especially if their health status changes after the initial purchase of the term policy or if they desire the benefits of a permanent policy, such as lifelong coverage and cash value accumulation.

Being able to convert a term policy to a permanent one helps ensure that the policyholder can secure insurance coverage even if their insurability status declines, making it a critical feature for those concerned with future insurability and lifetime coverage needs.

Other options do not accurately describe convertibility. The ability to increase coverage, switch insurance companies, or convert a policy to any investment type does not pertain to the specific aspects and guarantees of convertibility in life insurance policies.