June 14, 2016
Competency (Learn more)
Product Development & Reinsurance Sections
Most term life insurance policies offer a conversion privilege. This privilege gives the insured the option to convert the policy to a permanent one without providing evidence of insurability. This is subject to the restrictions outlined in the conversion clause in the original term policy. These converted policies are often many years removed from underwriting and may exhibit differing mortality from the block of underwritten permanent policies. As a result, the presence of converted policies may significantly affect the mortality experience of the overall permanent block.
The goal of this project is to quantify the mortality of converted policies and to identify the key variables that have an impact on that mortality.