A feature of a term insurance policy that allows for conversion to permanent insurance without evidence of insurability is called?

In the context of term insurance policies, convertibility is a significant feature that allows policyholders to transition from a term insurance plan to a permanent insurance plan without the need to provide medical evidence of insurability. This means that even if the policyholder's health has declined since initially purchasing the term policy, they can still obtain a permanent policy, which is especially beneficial for those whose health conditions may otherwise prevent them from securing new coverage.

This feature provides flexibility and an added security for policyholders, allowing them to maintain coverage as their needs change over time, usually as they age or experience changes in their financial or family situations. Convertibility is particularly valued by those who are concerned about the possibility of future insurability issues due to health concerns.

Renewability, while related to term insurance, provides the option to extend the coverage for an additional term without undergoing new health assessments, but it does not offer the same transition to permanent insurance. A dividend option pertains to participating policies that may provide dividends as a return of excess premium, which is distinct from the conversion feature. Therefore, the correct answer emphasizes the specific capability of converting term insurance to permanent insurance without requiring further evidence of insurability.