Can a Term Life Policy Be Converted to Whole Life?
Sometimes, what had been a good thing becomes less useful. There’s nothing bad about that; needs change over time, which is why we swap out cars, jobs, and even where we live. What about insurance policies? Can a term life policy be converted to whole life?
What Are Term Life and Whole Life Policies?
Let’s set the stage: A term life policy is, at its most basic, coverage for a predetermined amount of time, or “term.” That length is decided between you and a licensed insurance Agent based on your needs at the time of purchase. Term life policies generally feature lower premiums than whole life.
A whole life policy can last for your whole life. While premiums for a whole life policy can be higher than those for term life, whole life policies can also generate a cash value, which you can borrow against or withdraw funds from.
Why Would I Convert to Whole Life?
Each policy is useful under certain circumstances. So why would you change? Well, if your term life policy is due to expire soon, you may want to guarantee you have coverage for the remainder of your life. You may be at a place where the higher premiums are not a deciding factor, or be near the end of your life but nearer the end of your term policy.
How Can I Convert a Term Life Policy to Whole Life?
Most term insurance policies will allow conversion from term life to whole life. After all, you’ll be indefinitely extending your business with the Company, and paying more to boot. We recommend you speak with a licensed insurance Agent about the factors around converting to a whole life policy, and the ways they can help you with a smooth, hassle-free conversion.
Sources:
“Reasons to Convert Term to Whole Life Insurance,” NerdWallet
“How Do Term Conversions Work?,” Quotacy
“6 reasons why you should convert term life insurance to permanent life insurance,” Insurance.com
Categories: Life Insurance, Term Life Insurance, Whole Life Insurance