5 Reasons to convert your term insurance policy
1. No health questions
Term conversions are simple and require no medical exams or questions. Even if you are uninsurable, this option may be taken advantage of. Most every term policy has a conversion option.
2. Coverage remains in force to age 120
We can usually set this for any coverage duration you wish. If coverage is needed to age 85, 90, 100, or longer, we can generally customize this.
3. Easy to implement
One document and it is done!
4. Build tax –deferred, accessible cash value if you wish
Some people use cash value insurance for the tax advantages…cash may be withdrawn, borrowed and accessed in a number of ways on a tax-free basis (if structured properly)
5. Most of us will outlive our term policies
Very few of our beneficiaries will ever collect on our term policies (estimates are < 3%) as they either expire before we do or become too costly to maintain. Most beneficiaries of permanent life insurance policies will collect.
Call us to find out how to take advantage of this strategy – we are happy to help implement and we work with 100’s of different and popular insurance companies.
Term conversion is the right of an existing term life insurance policyowner to exchange their term policy for a permanent policy while you are in the conversion period (certain time limits apply and they vary by policy and company) without a medical exam or health questions. The only question I have ever seen on some of these applications is regarding tobacco/nicotine use.
The permanent policy issued may be one of several offered by the company, and these options can be tricky if you don’t know what to ask for. Typically, the inside agents at these companies are not highly skilled and you may end up with a new policy that is not the most suitable for your needs. It s a matter of asking the right questions and obtaining the most cost-effective plan available based on your goals and objectives.
The most efficient way to determine if and what options are available is to call us and we will conduct a 3-way call with the company to discover what all viable options are….within minutes we have the answers and will then run ideas/quotes for you to consider.
Most people are unaware that they have this right or that in many instances, you canconvert portions of your term policy if desired. For instance, if you own a $500,000 term policy and wish to convert $100,000 to a permanent policy, your end configuration would be $400,000 of remaining term and $100,000 of permanent coverage. As long as you are aware of the minimum amount of term insurance allowed by the company, you may convert in increments.
Many people purchase term insurance feeling as though they need temporary protection only to discover later on that they indeed need coverage far beyond the term guaranteed premium period. In this case, a conversion may be a good option as there is no medical exam or underwriting required.
For instance, let’s say your term policy has 2 years left on it and since the policy was issued, you have developed a health issue that will either increase rates for a new policy or renders you uninsurable. A conversion allows you to extend your coverage period w/o any health considerations and your new rates will be based on your originally issued rate class. If you were a preferred risk at policy inception, you will be issued a converted policy at that rate class. You will, however, pay a new rate based on your attained age.