On what basis is the premium for a permanent policy determined when converting from a term policy?

The premium for a permanent policy when converting from a term policy is determined on an attained age or original age basis. When an individual converts a term policy to a permanent one, the insurer typically calculates the premium based on the insured's current age, which is the attained age, at the time of conversion. This method reflects the increased risk associated with the policyholder's increasing age.

The original age basis, while relevant in some contexts, does not apply to the premium calculation for conversion, as it doesn't take into account the insured's current risk profile based on age. Instead, utilizing the attained age recognizes that the longer the term policy is held, the more aging occurs, affecting the premium rates for the new permanent policy. This approach aligns the premium with the actual risk posed by the insured at the time they convert to the permanent coverage.