Keep your term plan convertible

A convertible term plan provides a policyholder with the flexibility to adapt to changing life circumstances.

- SAIKAT NEOGI

It sets affordable premiums in the early stages of life and offers the flexibility to switch to a savings-linked or permanent life insurance plan later.

Such a plan is particularly useful for those who are young, healthy, and unsure of their long-term insurance strategy. In the initial years, when responsibilities are low and income is still building, a pure term insurance is cost-effective. As life progresses, a convertible term plan allows an individual to migrate to a lifelong or savings-focused plan later, without buying a fresh policy from scratch.

Casparus J.H. Kromhout, MD and CEO, Shriram Life Insurance, says for young professionals who want affordable coverage now but might consider lifelong protection later—as a basic term plan covers a certain number of years only—a convertible term plan is useful. "For freelancers and entrepreneurs with unpredictable incomes, a convertible term plan gives room to upgrade the policy later," he says.

How it works