Converting A Term Life Insurance Policy To A Permanent One

Term life insurance is a very affordable way to keep your family insured during your early years. Since a young family has a lot of financial obligations, term life insurance very conveniently combines security and affordability for you. However, term policies are not forever, and when the term comes to an end, you will have to look for another insurance avenue. Unless you have planned ahead of time, your low cost premiums will be replaced by costly premiums.

Why convert to a permanent life policy
What can you do to avoid paying higher premiums when your term policy ends? Most term policies come with a convertibility option, allowing you to migrate to a permanent life policy within a certain stipulated period. If you feel the need for life insurance coverage when your term life policy ceases, you should seriously consider the convertibility option. Since buying a fresh term or permanent life policy will attract high premiums, you will have to carefully plan ahead for the time your term policy will lapse.

As you age you become more stable financially. However, even though most of your obligations are taken care of, you still have to consider factors like possible ill health, hospitalization or expensive medication that may set you back financially. A permanent life insurance policy will help you to provide for your family, despite these expensive financial setbacks.

The importance of converting early

The most important factor in exercising the conversion option is to do it within the time frame specified in the policies. Some policies mention that you can exercise the conversion option no later than a certain age. If you always had a long-term plan of buying a permanent life policy, then do so at the earliest because as you age, you will attract higher premiums.

The procedure of converting from term life to permanent life
The procedure to convert is very simple. You will need to get in touch with the same life insurance agency or agent that sold you the term life policy. They will tell you which permanent life plans you are eligible for. Go over all aspects of each of the options offered to you and decide which one to go for, preferably one that offers you the best benefits at an affordable premium.

If you have opted to convert only a part of your term life policy, make sure that you are issued a fresh term policy for the revised amount, along with your new term life policy.

Benefits of converting from term life to permanent life

• Quick and easy: The procedure to convert as detailed above is proof of this. You won’t be asked to take a fresh medical exam, and neither will you be asked any health, lifestyle or occupation-related questions.
• The advantage of level premiums, for life: With a term policy, there are always two concerns †what you will do when the policy lapses, and how high the premiums will be if you would need to buy a fresh policy at the end of the term. However, when you choose to convert to a permanent life policy, your premiums will remain the same until you die.

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