“Should You Consider Converting Your Term Life Insurance Policy?”

You can convert a term life insurance policy to everlasting coverage.

It is common to purchase time period insurance because it offers a greater dying benefit at a lower price than permanent life insurance, such as whole life or standard life. As the name implies, term insurance provides protection for a specific and limited period of time.

What can you do if you know that you would like a part or all of your insurance policy to last past the initial length of time?

CONVERSION PRIVILIGE

Most term insurance policies include a conversion privilege. This is a contractual right to change all or part of the period policy for a permanent coverage without having to prove insurability. This right is available to you even before the initial time period expires.

What does this mean to me? This means that after your first coverage year, you can change from a restricted-time benefit to an everlasting profit without answering any health questions or having to undergo bloodwork, or other bodily exams. The dying benefit for the new permanent coverage is usually in force until age 121. This provides you with lifetime protection.

WHY CONVERT POLICY?

Many reasons exist for a person to change a term policy.

  • COST The price could be the deciding factor when purchasing the initial time period coverage. A lifelong policy is needed, but the insured may not be able to afford it. Once sufficient funds become available, the insured can purchase lifelong coverage.
  • CHANGE OF CONDITIONS The insured wants the conditions modified, and he or she wants to extend the time period that the coverage will be under pressure. The insured can enjoy peace of mind by not having to prove insurability.
  • PLAN – The conversion may have been part of a unique plan. When making a preliminary purchase, some insureds consider the conversion provision.

Conversion is an effective way to get the most out of your existing term life insurance policy. Talk to an independent agent in your area to determine if converting your term policy is right for you.


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