If you’ve been shopping around looking at different types of life insurance you may have had some trouble deciding whether you should go with a term life insurance policy or a permanent life insurance policy such as whole life or universal life insurance policy. However in this article I’m going to show way to possible have the best of both worlds, convertible term life insurance.
What Is Convertible Term Life
Convertible term life insurance is a policy that gives you the option to switch to a permanet policy like a whole life, universal life, indexed universal life, or even a variable universal life policy.
However not every term life policy has this feature but it’s being found in more and more life insurance contracts these days. However most companies will have a typical set of guidelines you will have to meet in order to do this. Below are some benefits and disadvantages.
The first big benefit to this option is that it can give you coverage for the rest of your life. With a term policy you’ll be covered for only a specific amount of time. With convertible term life you will be able to convert before the coverage ends and keep it for as long as you live.
Secondly, this option also means you won’t have to reapply for coverage. With a term policy once your term period is over you would have to reapply. By converting to a permanent policy you’ll be able to continue the coverage and not have to go through all the issues of reappling for a new policy.
Lastly, in most cases the insurance company will not be able to turn you down for coverage even if you have health issues. This also means you won’t have to do an medical evaluations or even answer any medical questions.
Their are also some disadvantages as well, first off once you convert your policy for whatever reason you will no longer be able to go back. This type of policy is a one way street only so consider your options before you switch.
Secondly, know that just because they can’t turn you down for converting your policy because you have a few health problems, they can still raise your premiums, and in most cases they probably will.
Who Is Convertible Term Life Insurance For
First off, a convertible term life insurance policy is great for someone who may not be able to get more life insurance for health related reasons but may have a term policy that allows this provision.
This option is also great for those who would like to extend their current life insurance policy without renewing. For example, you may be at the end of a 30 year term life policy and by converting your term policy to a permanent one you won’t have to go through the process of getting new coverage.
Finally, this option is great life insurance option for seniors. Life insurance for the elderly can be a bit tough to get depending on age and health conditions and by converting your term policy to a permanent policy it could possibly guarantee you the coverage.
Convertible term life insurance is a great option to have attached to your term life policy. I feel it gives you that extra option just in case you need it. What’s your thoughts?