Term Life Conversion to Whole Life

Converting Term Insurance to Whole Life Insurance

 

If you own a term life insurance policy you may be wondering if you can convert your coverage to permanent life insurance. 

It’s a common question because many of us find our circumstances change over time, and the temporary coverage you needed years ago may not meet your current and future life insurance needs. 

Over time our situation changes, we take on financial responsibilities and have a need for life insurance that will remain in place for a longer period of time than term insurance offers.

 

Can You Convert Term Insurance to Whole Life Insurance?

Yes. Many term life policies offer the option to convert coverage to permanent protection.


Convertible Term Life Insurance

Life insurance coverage that ca be converted into permanent insurance regardless of an insured’s physical condition or health, and without medical examination.

The individual cannot be denied coverage or charged an additional premium for any health problems.

Make sure you review your term life insurance contract and find out if there is a date by which you must contact the insurance company to request conversion of coverage to whole (permanent) life insurance.

You can either contact your life insurance agent or your insurance company to review the requirements to convert coverage.                                   

NOTE: Your premium for your new permanent life insurance policy will be higher than you paid for your term insurance plan.

  

Conversion Privilege of Group Term Life Insurance Plans

Right of a certificate holder to convert group life insurance to an individual policy without a physical examination to furnish evidence of insurability. Usually this must be done within 31 days of termination of employment.

Under group life insurance, conversion is made at the employee’s attained age rate, which can be prohibitively costly in later years.

 

How Term Conversion Works 

If you own a term life insurance policy you may choose to convert your temporary insurance to permanent insurance by a specific date stated in your life insurance contract.

You can contact the insurance company to request the conversion of your insurance policy to permanent life insurance. The insurer will review your policy and advise you of the new premium offered for your permanent coverage.

 

Why Convert Coverage from Term to Whole Life?

You may decide after owning your term life policy that you need your insurance to last for a period longer than the curation of your term coverage. 

For example, your health may have worsened and you find you are insurable. However, if you still need life insurance, you can convert your term to permanent life insurance without having to prove insurability.

 

Does Your Premium Change for Permanent Insurance?

Yes. Your premium you pay for permanent life insurance will be much higher than the premium you are currently paying for a term insurance policy.

The reasons your premium will be higher for permanent life insurance include:

  • Life Expectancy – You are older now than when you purchased your term life insurance policy.
  • Lifetime Protection – Permanent life insurance provides guaranteed lifetime coverage compared to term insurance which is temporary and which you may outlive.
  • Savings Component – A whole life insurance policy may build up cash value inside the policy over time from which you may take a loan in the future.

 

Is a Physical Exam Required?

No, there is no physical exam required in order to convert your term life policy into a whole life insurance policy.


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