Convertible Term Deadline and a BRCA Diagnosis

The conversion privilege is contractual. As long as Elena converts before the earlier of 10 years after issue or age 45, the insurer cannot require evidence of insurability. Since the policy was issued at age 30, the 10-year deadline is age 40, and she has about eight months left. Her BRCA1 result cannot be used to deny conversion during that window. Waiting until just before the deadline is permitted, but it is not risk-free. She must keep the term policy in force and pay premiums; if the policy lapses, the conversion right ends. She should calendar the deadline and confirm the insurer's exact conversion procedures, including whether the request must be received before the deadline or merely postmarked. Waiting also means conversion at an older attained age, so the permanent premium will be higher. If she dies before converting, the term policy pays the $750,000 death benefit, but she will not have permanent coverage. The safe conclusion is that waiting is allowed, but only with active monitoring and no lapse.

Converting now locks in the age-39 premium of $9,800/year, which is $800/year less than the age-40 premium of $10,600. Over 20 years, that difference is $16,000, and it grows if she keeps the policy longer. However, she is facing medical leave and has only $18,000 in savings, so cash flow matters. A partial conversion may be the best judgment call if the contract allows it: convert a portion, such as $250,000, now to establish permanent coverage at the younger age, and keep the remaining term in force for the death benefit during the leave. She can then convert the balance before the deadline if cash flow improves. If partial conversion is not allowed, she should compare the cost of paying the permanent premium during leave against the cost of waiting and paying a higher premium for life. The BRCA result does not affect the conversion right, so the medical issue is a cash-flow problem, not an insurability problem. She should also ask whether a waiver of premium rider is available and whether it can be added without underwriting.

If partial conversion is permitted, the converted permanent policy becomes a separate contract and remains in force as long as premiums are paid. The unconverted term portion continues under the original term policy. If she later lets the remaining term lapse, she loses only that term death benefit; the permanent coverage is unaffected. The key is to confirm in writing how the insurer administers partial conversions, whether the permanent policy has its own contestability period, and whether the term portion keeps the original conversion deadline. She should not assume that paying the permanent premium also pays the term premium. The agent should set up separate premium reminders and verify that the permanent policy is issued before she relies on it. If she converts the entire policy, the term contract ends and the permanent policy replaces it; a lapse then would leave her with no coverage unless the permanent policy has cash value or a nonforfeiture option.