Is It Worth Converting Term To Whole Life?

Term life insurance policies can be a great option for families, as they offer coverage for the most crucial financial years. However, as goals and needs change, policyholders may find that their term length is no longer sufficient. Fortunately, most term life policies offer the option to convert them into permanent policies, which can offer lifetime coverage. Here’s what you need to know about converting term life to permanent life insurance.

Policyholder Policy Annual Premium
30-year-old male, nonsmoker, excellent health 30-year term, $500,000 death benefit $368.20 (preferred plus rate)
Same male, now age 40 Converted to a guaranteed universal life, $500,000 death benefit $4,580 (preferred plus rate)

Converting a term policy to a permanent policy is simple and does not require a medical exam or underwriting process. However, policyholders should consider several factors, such as the conversion period, the impact on premium rates, and the type of policy they want to convert to. It’s also important to have a clear goal in mind for the conversion, as well as an understanding of what policies are available and what long-term care benefits may be included.

Before converting, policyholders should consult with their insurance agent or company and ask themselves what their objective is for converting, what they can afford, what permanent policies are available, and whether they can get a long-term care benefit or a rising death benefit. It’s also important to shop around and compare rates from other insurers to ensure that converting is the best option for their needs and budget.

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* Based on website quote requests, through 5/31/23.
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