How is the premium calculated in a convertible term policy?

In a convertible term policy, the premium is calculated based on the insured's attained or issue age at the time of conversion. When an individual opts to convert their term insurance into a permanent policy, the insurer takes into account the age of the insured at that specific moment. This means that if the conversion occurs at a later date, the premium will reflect the increased age, which often results in higher premiums due to the increased risk associated with aging.

This method ensures that the premium accurately reflects the current risk profile of the insured. Additionally, it aligns with standard industry practices where age is a fundamental factor in underwriting life insurance policies, as it is directly related to mortality rates. By using the attained age for premium calculations, the insurer ensures that they are accounting for the additional risk the policyholder presents as they become older.