Which plan allows conversion to a permanent whole life policy without evidence of insurability?

• A. Key-Person Insurance
• B. Renewable Term Policy
• C. Deferred Compensation Plan
• D. Convertible Term Policy

Answer: (D)

A convertible term policy allows policyholders to convert their existing term life insurance into a permanent whole life policy without the need for evidence of insurability. This is a significant advantage for insured individuals, as it provides the opportunity to secure lifelong coverage regardless of changes in their health status. This means that even if a policyholder's health declines over time, they can still obtain permanent coverage, which may not be possible if they were to apply for a new policy at that time.

This feature is particularly valuable because term policies primarily provide coverage for a specified duration, and transitioning to a permanent policy helps ensure lifelong protection and can also accumulate cash value over time. The ability to convert without evidence of insurability is a crucial element of these policies as it offers flexibility and security to the insured.