Refers to an insurance policy with a provision that stipulates the policy can be converted to another type of policy.
Insurance Encyclopedia
Convertible bond
Type of investment that permits the owner to change it into a specific number of shares of stock.
Convertible collision insurance (Vehicle Insurance)
A policy that covers all losses after claims exceeding the deductible have been paid. This type of policy is rare.
Convertible currency
In the Lloyd’s market this means any currency other than sterling, US dollars and Canadian dollars. In the company market it means any currency other than the main currencies in which the business is transacted. Convertible currency is normally accounted for in sterling.
Convertible Term
Convertible term is a type of term life insurance policy that can be converted to a permanent life insurance contract (whole life or universal life) without evidence of insurability. For example, a young woman may purchase term insurance to cover the basic needs of her family (pay off debt, final expenses, etc.). If the term is convertible to whole life, she may, before the end of the policy term, convert to a permanent form of life insurance even if she has contracted a major disease or become disabled. (See Term Insurance).
Convertible term assurance
a term insurance policy containing an option to convert to a whole of life or life and endowment policy without further evidence of health.
Convertible term insurance
Type of term insurance in which the policyholder is allowed to change the term insurance policy to a whole life policy without giving evidence of insurability. The premium amount is based on the age of the insured at the time of the conversion.
Convertible term life policies
See: Conversion 2.
Cooling degree day (CDD)
A measure of how much the average of the daily high and low temperature is greater than a reference temperature (typically 18°C or 65°F). Cumulatively CDDs measure the intensity and duration of warmth and indicate how much ‘cooling’ is required by, say, UK energy companies suffering poor sales during warm weather. An average daily temperature of 23°C creates 5 CDDs towards the season’s aggregate. UK energy companies hedge against warm weather by purchasing call options indexed by CDDs. Each CDD has a notional value, the tick, and the payout occurs when the cumulative CDDs exceed the strike. See WINTER SEASON; HEATING DEGREE DAYS; COOLING SEASON; GROWING DEGREE DAYS.
Cooling off period
1. Under the FSA’s Conduct of Business rule 6.7, it is the period allowed to a customer following his receipt of the statutory notice during which he may cancel his investment agreement. The period allowed in the case of life policies, pension contracts, appropriate personal pensions and other cancellable investment agreements varies between 14 and 30 days (www.fsa.gov.uk). 2. Periods of reflection are also allowed under the Consumer Protection (Distance Selling) Regulations, and this has implications for those selling insurance over the Internet and by other distance methods. 3. The cancellation rights of retail customers buying general insurance products are contained in Chapter 6 of the FSA’s Insurance: Conduct of Business Sourcebook. ICOB allows 30 days for pure protection contracts and 14 days for general insurance.
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A period during which one has agreed to enter into a transaction such as a health insurance agreement may withdraw without penalty.