Convert Your Term Life Insurance To Permanent Life Insurance Before You Retire

There are two schools of thought when it comes to buying Term Life Insurance versus permanent life insurance such as: Universal Life or Whole Life. However, that is a completely different topic that I’m not going to discuss in depth in this particular blog post. For more info on that topic, please check my other blog posts such as: Whole Life Insurance vs. Term Life Insurance and Types of Life Insurance.

Term Life Insurance can be an efficient way to protect your loved ones with the appropriate protection you need, at a low cost during your working years since term life insurance cost is far less than that of a permanent type policy. Part of the reason that Term life insurance can be bought less expensive than a permanent policy is that a Term policy is designed to just provide temporary coverage for a specified number of years, generally for a temporary need.

Retirement is a life event that uncovers a whole new set of needs and concerns. Life insurance can often be a valuable asset during those years. When a Term policy lapses, in most cases that insured would have to go through a new paramedic exam involving blood work, urinalysis, answering their own medical health questions as well as some of their family's medical history, and possibly many additional health qualification tests in order to be approved for a new life insurance policy. At retirement age, these type tests and questions may uncover current health issues that were not present when the original term policy was bought many years ago. Then the underwriting rating could end up being less favorable costing you a higher premium, or possibly you may not even be insurable any longer.

Fortunately, many Term Life insurance policies off a convertibility option. This valuable feature allows the policy owner to convert the Term policy, or portion of it, to a permanent policy such as: Whole Life or Universal Life, at the same heath rate classification without submitting evidence of insurability. Meaning that the insured won’t be required to go through the health qualifications such as: a new paramedic exam,  answer health related questions, etc. However keep in mind that some insurance contracts only allow conversion in the first few years of the policy, while others allow it at any point during the entire term, yet others only allow conversion up to a certain age. One other important point, is that some insurance companies only have limited choices of permanent products to choose from when converting, while other insurance companies give you more flexibility on your product choices when you convert to a permanent policy.

Please note that even if you have maintained favorable health, age is still a primary factor in the cost of a life insurance policy. So as you get older, the more a policy will cost. This applies to both newly underwritten policies and term conversions. 

Converting term insurance as early as possible can effectively lock in a more cost effective premium in retirement.

Feel free to call me directly at 941-404-5334 to set up an appointment to help determine if converting an existing term policy is right for your situation.

Other related blog posts: 

12 Benefits Of Converting Your Term Policy To A Permanent Policy

Use Of Your Term Life Insurance Policy's Conversion Option

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Note: Life Insurance information can be confusing to many people. As an "independent licensed agent" I can explain things to you in simple terms so you feel comfortable making a decision. Then I can help you choose a life insurance policy, from many choices of different insurance companies, that you feel fits your needs. Plus if you choose to work with me you will have personalized service by a local agent that can shop premium quotes for you. If you would like my assistance to discuss and/or start the process of getting you insured please call me at 941-404-5334. 

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