How To Convert Term Life To Permanent Life Insurance
Converting term life insurance to permanent life insurance is a process that allows you to change your existing term policy to a permanent policy, such as whole life insurance or universal life insurance. This can be a good option if you need more permanent coverage than term life insurance provides, or if you want to build cash value.
To convert your term life insurance to permanent life insurance, you will need to contact your insurance company and request a conversion. Most insurance companies allow you to convert your policy without having to take another medical exam. However, there may be age restrictions and other requirements that apply.
Once you have requested a conversion, your insurance company will provide you with a new policy application. You will need to complete the application and return it to your insurance company. Once your application is approved, your new permanent policy will go into effect.
Why to convert term life to permanent life insurance
There are a few reasons why you might want to convert your term life insurance to permanent life insurance.
- More permanent coverage: Term life insurance only provides coverage for a specific period of time, such as 10, 20, or 30 years. If you die after your term policy expires, your beneficiaries will not receive a death benefit. Permanent life insurance, on the other hand, provides coverage for your entire life.
- Cash value: Permanent life insurance policies accumulate cash value over time. This cash value can be borrowed against or withdrawn tax-free.
- Estate planning: Permanent life insurance can be used as a tool for estate planning. The death benefit from a permanent life insurance policy can be used to pay estate taxes and other expenses after your death.
Things to consider before converting term life to permanent life insurance
Before you convert your term life insurance to permanent life insurance, there are a few things you should consider.
- Cost: Permanent life insurance is typically more expensive than term life insurance. This is because permanent life insurance provides more coverage and benefits.
- Needs: Consider your needs before you convert your policy. If you only need coverage for a specific period of time, term life insurance may be a better option for you. However, if you need more permanent coverage or you want to build cash value, permanent life insurance may be a better option.
- Fees: Permanent life insurance policies typically have fees associated with them. These fees can vary depending on the type of policy and the insurance company. Be sure to understand the fees involved before you convert your policy.
If you are considering converting your term life insurance to permanent life insurance, it is important to talk to a financial advisor. A financial advisor can help you to understand the pros and cons of converting your policy and can help you to choose the right type of permanent life insurance policy for your needs.
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