Reasons to Convert Term to Permanent Life Insurance
If you own a term life insurance policy you may at some point consider the idea of converting your temporary (term) coverage into a permanent life insurance policy which will provide you with lifetime protection.
What are the Benefits of Life Insurance Conversion?
There are several very beneficial reasons you may want to convert your term policy:
Many people who buy a term life insurance policy may outlive the duration of their coverage. However, they may still have a need for protection.
But, if they wait until their current term policy expires, they will have to apply for a new plan and may be uninsurable at that time, depending on their health.
By converting your coverage to permanent insurance, you won’t have to take a health exam to qualify for the policy.
If you are worried about outliving your coverage you won’t have to if you switch to permanent protection, because your policy will provide you with insurance as long as you live, and pay your premiums.
One thing that’s certain with permanent life policies, your premium remains the same as long as you pay your premiums on time.
However, certain permanent plans; such as, universal life and variable life may have different rules regarding the premiums. But regular whole (permanent) life insurance plans offer premiums that remain the same throughout the life of your policy.
Cash Accumulation and Loans
A whole life plan may build up some money inside your policy over the years. And, if you need some cash, you may be able to take a loan from your policy, which you pay back (basically, paying back yourself).
With whole life insurance plans a death benefit will be paid out to your beneficiary upon your passing. Your beneficiary may use the funds, or a portion of the funds, to cover the cost of your funeral, burial and related final expenses.
So, there are many important reasons to convert your temporary plan into a permanent solution providing lifetime protection for your loved ones.
Drawbacks to Converting Your Life Insurance
There is one major drawback if you convert your policy to permanent coverage – Cost.
When you change from term to permanent insurance your premium will be much higher than you were paying. The cost of your new plan will be based on you age and amount of coverage at time of conversion, and whole life costs about 2-3 times more than term policies, usually.
Life Insurance Resources
Request a Free Life Insurance Quote – Compare the lowest prices on life insurance from 40 of the best life insurers in less than 2 minutes.
Guaranteed Issue Permanent Life Insurance – Here’s how people ages 45 to 85 can purchase up to $25,000 of permanent life insurance with guaranteed approval – you cannot be turned down regardless of your health.