What Are The Benefits Of Converting Term Life Insurance To Permanent?

A term-to-permanent life insurance conversion, or “term-to-perm” conversion, allows you to extend your life insurance coverage. Instead of letting it expire, you may be able to exchange it for a permanent policy without needing a new medical exam. After switching to the permanent policy, you’ll have a death benefit that lasts your entire life (as long as premiums are paid and the contract retains value). The new policy’s premium payments will likely be higher.

Reasons to consider converting your term life policy to permanent life insurance:

Reasons to consider converting Examples
Extend coverage As a term policy approaches the end of its coverage period
Health has worsened If your health has worsened and you need coverage for a longer period of time, a conversion may be your best (or only) option.
Upgrade to a longer-lasting policy Maybe you originally wanted permanent life insurance, but the higher cost kept you from purchasing it.
Responsibility for someone who will always be financially dependent on you For example, a child with special needs
Business continuity planning If unexpected business obligations arise
Updated financial approach As you grow older, your financial goals may simply shift.

You may be able to convert all or some of your term life insurance to permanent life insurance. There is usually no direct cost to convert term life insurance to a permanent policy. However, your premium payments will likely be higher.

Choose a type of permanent life insurance that aligns with your financial goals and strategy. During a term-to-permanent conversion, your permanent life insurance choices will vary based on your insurer. Choices may include whole, universal or variable universal life insurance.

Ready to learn more about your life insurance options? Connect with a financial advisor near you.

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