Use Of Your Term Life Insurance Policy's Conversion Option


As you may already know, a Term Life Insurance policy is considered a "temporary" type policy, for a specified number of years. Keep in mind with a term policy, if the policyholder outlives the initial predetermined term length, the new premiums for that same policy can skyrocket or that life insurance policy can terminate and the insurance company keeps all your premiums you paid over the years without having to pay a cent to any beneficiaries. So you may want to consider a permanent type policy like Universal Life or Whole Life. Permanent insurance can provide guaranteed lifelong protection (or to a specific age) as long as the necessary premiums are paid.

After your initial "term" is up on Term policy, generally you are allowed to keep the policy in force for a certain amount of time, but the premiums skyrocket going forward and can become prohibitive. So at that point (or preferably way before then, by planning ahead) you'll need to shop around for a new policy. Unfortunately when your specified term is up, you also will be older then when you first purchased your existing term policy. Many times people's health may have deteriorated by then also. Making it difficult and sometimes impossible to get approved for coverage with a new traditional life insurance policy. That is when this conversion option may be a good idea such as, if you are not in good health and fear you may not be approved thru normal traditional life insurance. However if you are still in good health, it most likely pays to shop around for a new policy and compare rates since conversion premiums are not always the most competitive rates for something similar thru another company.

Each insurance company has different time periods when you are still able to convert. It is stated in your policy when you are permitted to convert your term policy to a permanent policy (with the same insurance company) without having to get another medical exam and go thru underwriting. So if you were healthy when you first got the original policy and were approved with a good rate classification, you should be able to keep that same rate classification even if your health has deteriorated when you are planning to convert to a permanent life insurance policy with the same company.

I can assist you with both the conversion process or shopping for a new policy, if you have any questions, feel free to give me call to assist you.

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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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