What characterizes convertible term insurance?

Convertible term insurance is characterized by its ability to allow policyholders to convert their term policy into a permanent life insurance policy without undergoing additional health assessments. This means that at any point within the term period, the insured can choose to change their coverage to a permanent plan, locking in their insurability regardless of any changes in health that may occur during the term. This feature is particularly valuable for individuals who may want to secure long-term coverage but initially prefer the lower premiums associated with term insurance.

The other choices do not accurately capture the defining characteristics of convertible term insurance. For instance, automatic renewal without health checks pertains more to renewable term insurance, rather than convertible term policies specifically. Providing coverage for a limited duration only is a fundamental characteristic of all term insurance, not just convertible term. Lastly, the inclusion of a premium refund option is not a standard feature of convertible term insurance; this element generally refers to a different type of term policy known as return of premium term insurance.