If you need life insurance coverage for a longer period than the term of your current policy, you might consider converting from term life to whole life insurance. Here are some common scenarios in which switching to a permanent policy makes sense:
| Scenario | Reason for Conversion |
|---|---|
| Unforeseen dependency | Converting to permanent insurance can help provide for the unexpected needs of loved ones. |
| Outstanding debt | Converting to whole life maintains coverage for the entirety of your life and protects your family financially. |
| Avoiding underwriting | Converting may allow you to avoid the medical exam and lifestyle assessment required for a new whole life insurance policy. |
| Partial conversion | Converting a portion of your term policy to whole life can result in a smaller death benefit and lower premiums. |
When switching from term to whole life insurance, you need to determine if your policy has a conversion provision or a term conversion rider. If your insurer allows it, a partial conversion enables you to convert only a portion of your term life policy to whole life. Purchasing another term life insurance policy could make sense if you only want life insurance coverage for a short amount of additional time rather than for the rest of your life. Another option available for those worried about leaving their family with funeral costs is to purchase final expense insurance.
Before making any changes, it’s best to consult with your life insurance company or agent to review your options and ensure you make the best decision for your current and future needs.
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Article Sources
- MarketWatch. How And Why To Convert Term Life To Permanent Life ...
- Financial Services Regulatory Authority of Ontario. Converting Term Life Insurance To Whole Life
- Dundas Life. Converting From Term To Whole Life Insurance
- LSA, LLC. Can I Convert My Term Life Insurance To Whole ...
- Fabric Insurance Agency, LLC. Convert Term Life To Whole Life Insurance (2023 Guide)