What is a term conversion rider?

A term conversion rider is a valuable provision attached to a term life insurance policy, granting policyholders the right to convert their existing term policy into a permanent life insurance policy without requiring proof of insurability. This means that when a policyholder decides they would like to transition to a permanent policy, they can do so regardless of any changes in their health status that may have occurred since they originally purchased the term policy.

This option is particularly advantageous because it allows individuals to secure lifelong coverage without having to undergo medical exams or provide additional health information at the time of conversion. It offers flexibility and peace of mind, especially for those who may develop health issues later in life or wish to continue life insurance protection beyond the term's expiration.

The other options do not accurately describe the functionality of a term conversion rider. For instance, increasing coverage limits pertains to a different type of policy feature, while defining the term length of a policy or providing premium reductions for specific risks (like smoking) relate to other provisions or riders but do not encompass the main purpose of the term conversion rider.