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Term Life Insurance: Renewable and Convertible options

Term Life Insurance plans are designed to provide a death settlement to individuals who die within a specific time period. For more details on the definition of term life insurance plans please click the previous link.

Whilst Term Life insurance policies normally stop providing cover at the end of the term, once the plan “runs out” there are options to continue the coverage.

Renewable Term Life Insurance

The phrase Renewable Term Life Insurance might not make much sense in light of the fact that term life insurance plans only provide coverage for a specific length of time. However, under a renewable term life insurance plan the policyholder is offered the option to renew the coverage without submitting evidence of insurability.

However, this type of coverage does not provide an “automatic” renewal; the premium for the renewal of the term is adjusted upwards in light of the insured individual’s increased age.  Additionally, the renewal can only be made for a face value (or death benefit) which is equal to, or smaller than that which was provided in the previous term and the total number of times which the policyholder is able to renew the plan is usually capped. Furthermore, it is important to note that the premiums associated with a renewable term life plan are often higher than those for non-renewable term policies.

The most common form of Renewable Term Life Insurance policy in Hong Kong is the Yearly Renewable Term, or YRT policy. These plans are also known under the name Annually Renewable Term, or ART Policy.

Convertible Term Life Insurance

A Convertible Term Life Insurance policy is one which has a provision or rider allowing the policyholder the right to convert the plan to a permanent policy. It is a core feature of a Convertible Term Life Insurance plan that the policyholder does not have to provide proof of insurability when choosing to change the term plan to a permanent one.

In the event that the policyholder uses his right to convert the plan under this type of coverage then the premium for the permanent life insurance policy will be revised based on the increased age of the policyholder when they decided to change the plan.

When looking at Convertible Term Life Insurance in Hong Kong it is important to be aware that a number of restrictions are commonly applied to policies. This includes the fact that conversion of a term plan to a temporary one is usually only possible before reaching a specific age, and that converting the policy is not allowed when the plan has been in force for half of its total term. This means that if you had reached a specific age (normally 65 years old) or if your plan is more than 50% of the way through the term (6 years of a 10 year term, for example) a conversion would not be allowed.

Finally, the major restriction for a Convertible Term Life Insurance plan is found in the fact that the face amount of the new permanent life insurance policy can be no more than that of the term life plan, and may in fact be less as the term policy had been in force for a period of time.

Free Term Life Insurance Quotes in Hong Kong

If you would like to receive a free quote for a Renewable Term Life or Convertible Term Life Insurance plan in Hong Kong, simply complete the short form at the top of this page to submit your request.

Once a CCW Global Insurance Broker has received your request they will contact you directly to further discuss your term life insurance needs. Additional information on this process can be found by clicking Our Life Insurance Quotes.

Please Contact Us in the event that you have any additional questions or concerns about Term Life insurance in Hong Kong.

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