What Benefit Does An Insured Have When Buying A Convertible Term Life Insurance Policy?
A convertible insurance policy is a term related to life insurance. It provides the insured person coverage for a certain period of time. A convertible term policy allows the insured to convert a term policy to a permanent policy at a later date without any new or additional screening at the time of conversion, regardless of their medical condition, as long as the policy conditions have been maintained and payments made on time. This type of policy allows for obtaining less expensive term life insurance now while maintaining the option to convert to a permanent policy at a later date as insurance needs and financial resources change.
|Convertible Insurance Policy Benefits|
|Conversion to a permanent policy at a later date without new or additional screening regardless of medical condition|
|Saved expenses on buying a new policy|
|No need to undergo medical underwriting again to switch to permanent policy|
Most convertible insurance policies allow policyholders to convert the policy for a predetermined number of years. The new permanent policy will convert with the same value as the term policy, but the premiums for the policy will be higher after the conversion, as it goes from a term to a whole policy.
Buying a convertible insurance policy makes sense for insureds who can only afford a less expensive term policy. When buying insurance, permanent insurance tends to always be more expensive than term insurance. However, note that most conversion insurance policies have a conversion deadline. The conversion privileges are stated in the policy, and the exact policies it can be converted into will be stated by the contract and insurance company. A convertible policy can be converted into another type of insurance policy at the same insurance company. Make sure to understand the conversion options before choosing the term insurance policy and carrier.