Term Conversion
If you have shopped for or own a term life insurance policy, you might have heard the term Conversion Policy. Simply put, most term policies have a provision whereby, during the term of the policy, you can convert from a term policy to a permanent policy (universal or whole life).
Understanding the Benefits
- Permanent life insurance policies offer premiums that remain the same throughout your lifetime (as opposed to term insurance, which increases at the end of each term).
- A permanent life insurance policy may also build cash value, which may be withdrawn or borrowed against during your lifetime.
- By converting a term policy to a permanent policy, you can lock in your health class for the rest of your life while you are healthy.
- The conversion policy will be underwritten at your age at the time of conversion, so the earlier you convert, the less expensive the premiums will be.
While I don’t believe conversion is an option for all term policy owners, it is definitely something many should be reviewing with their life insurance advisor from time to time.
