What can a policyholder do with a convertible term policy?

A convertible term policy provides the policyholder with the option to convert their term life insurance coverage into a whole life insurance policy without the need to provide evidence of insurability. This means that the policyholder can make this conversion regardless of any changes in their health status since the original policy was issued. This feature is valuable for individuals who may develop health issues during the term of their policy, as it guarantees them the ability to secure permanent coverage without further underwriting.

This characteristic distinguishes convertible term policies from standard term policies, which do not offer such flexibility. It allows policyholders to adapt their insurance coverage as their life circumstances change, such as when they require a permanent insurance solution for long-term obligations. Therefore, the option to convert while bypassing the need for additional health assessments encourages engagement with life insurance policies, making them an advantageous choice for many.

The other options do not accurately reflect the features of a convertible term policy. For instance, extending the term at no additional cost is not a standard feature of convertible policies, nor is it typically unrestricted to change beneficiaries or access cash value immediately, as term policies generally lack a cash value component until converted or transformed into a whole life policy.