​A guide to term life insurance conversions.

Term Life can be simple; and it can also be complex. It may look like the cheapest is the best and it may be; if that is all you want...

Term insurance is a type of policy which has a fixed and guaranteed premium for a certain number of years. After that time period, you can still maintain your policy, but your annual premium can increase to approximately 20 times your current premium depending on your age and will continue to increase each year after that based on a formula called annual renewable term. In your policy, it states exactly what will happen to your premiums every year after the fixed premium period is over.

Term conversion means that within the timeline outlined in each policy, you have the right and option of trading in your term policy for a “cash value” policy also called “permanent” insurance. If you are healthy, this is not as important than if you are less healthy than when you obtained your original policy. You might think about a term conversion option as a hedge in case you still want life insurance after the fixed term is over but may not medically qualify then. You may be able to convert all or partial, depending on company. The benefit of a term conversion option is that you will be able to covert your term without a health evaluation, health questions or evidence of insurability.
 
Are all term conversion options equal? No, they run the gamut of possibilities, see examples below.

• Some term policies do not have a conversion option
• Some term policies are only convertible for the first 5, 7, 10, 20 years or to age 65 or age 70
• Some term policies state the earlier of X years or age nearest, to age, or before that age.

Conversion products:
          Some policies offer all permanent products contractually guaranteed at time of               purchase.
           Some policies offer all permanent products offered at the time of conversion.
           Some policies offer only one permanent product only, or 2-3 specific options.
           Some policies offer only one risk impaired product, which will more expensive.  
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This is why you need to make a decision on your term conversion option today and not 20 years from now. If you are looking for the cheapest solution to cover a specific time period or risk exposure. I recommend that you use a quote engine with access to top niche carriers and work with the company you feel the most comfortable with. You want access to top 3 carriers who niche out the term insurance. you want There is little need to use a career agent today for basic term insurance.
 
If you are looking for term insurance to convert down the road to permanent coverage. You should research each company’s top competitive product  you are considering and see if this specific product is available upon conversion. You should also be clear about what type of product you want to convert to. This is a more complex research project.

Come play with our quote engine and find the best company and policy for you.