Last Updated: July 2019
Term life insurance conversions can help consumers take advantage of expiring term life insurance policies and convert them into permanent life insurance policies known as whole life insurance coverage.
For many, this can be a huge boost to their financial security and add protection for many years to come.
Not to mention, the cost can be more affordable than most consumers believe to complete a term life insurance conversion.
The rest of this brief article will detail the ways you can convert a term life insurance policy and what you need to understand about the process:
- What Is A Term Life Insurance Conversions
- Term Life Insurance Conversions: The 3 Ways To Convert Your Policy
- Bottom Line, Converting Your Term Life Insurance Policy Can Be Painless
Life Insurance is Boring. Let’s Get To The Root Of It! Here are the key takeaways…
Term life insurance conversions allow consumers to take an expiring term life insurance policy and convert that same policy into permanent whole life insurance that does not expire. This allows you to add life insurance protection for your family and financial portfolio for the remainder of your life.
What Is A Term Life Insurance Conversions
Term life insurance is designed to last a set duration of time such as 10,15, or even 30 years.
Unfortunately, when this coverage expires, you typically do not get any return of premiums (unless you purchase ROP term coverage) and the coverage is no longer in force.
While you no longer have monthly premiums to pay, you also no longer have protection for your family.
However, you do have another option that you can begin planning for right out of the gates.
Buying a term policy with a “conversion” rider is one of the best values your life insurance policy has.
The most common reasons our clients convert their term life insurance policies are the following:
- Their term policy is about to expire
- They’ve developed some health issues
- Needs changed from a temporary need to a permanent one
The biggest mistake consumers make when exercising this term life insurance conversion option is contacting the life insurance company directly.
This can often hinder your ability to complete a term life insurance conversion in the best fashion.
You never know when health concerns are going to deny you the ability to purchase a new policy after your current policy expires.
It can also be difficult to plan ahead and understand if you will need protection or not 20 years from now.
Life happens and things change.
Adding a conversion rider to your life insurance policy can dramatically help you plan ahead now and avoid these headaches in the future.
Now, let’s move into why you need to be working with an independent agent when you are ready to convert your term life insurance coverage.
Term Life Insurance Conversions: The Reasons To Use Independent Agencies
Here are 3 critical reasons why you should contact an independent agency to convert your term life insurance policy:
- There are different options for converting.
For example, you can convert your full death benefit or a portion of your death benefit. A customer service representative isn’t licensed to give you advice on what to do. We’ll present you all your options. - There are different products you can convert to.
Life insurance companies have several different permanent products – all meant for different objectives. You need to be sure the permanent policy you’re converting to meets your objectives and is the most competitive option. We have seen every kind of question even things as obscure as “What is a Collateral Assignment?” - The language in the paperwork to complete conversion can be confusing. The life insurance conversion paperwork combined with the illustration of premiums is confusing for the typical consumer. We’ll make sense of it all and answer any questions you may have.
An independent agency can help you understand your options and guide you through your options which can be confusing and overwhelming like mentioned previously.
An independent agency can also listen to your objectives, keep your budget in mind, and recommend the right product for conversion.
Independent agencies don’t charge for this service.
They ultimately only make money if you decide to work with them and they find the policy for you.
What Is Involved With A Term Life Insurance Conversion
A few steps are typically involved when you decide to convert a term life insurance policy:
Here is a brief overview:
1. Review your current term life insurance policy and determine the products that are available for conversion. At this point, an independent agency can advise you on what the best options are for your situation.
2. When you’re ready to do a conversion, you sign an “Agent of Record” form, basically naming the agency as your new agent of the policy. This lets us complete the conversion.
3. You sign the conversion forms and new life insurance illustrations.
That’s it!
It may seem shocking that it really boils down to such a simple process but term life insurance conversions are not as difficult as most consumers believe.
Bottom Line, Converting Your Term Life Insurance Policy Can Be Painless
Term life insurance conversions can be extremely easy to complete and provide you and your family with massive benefits.
They need to be considered.
With a simple phone call and steps completed, you can take an expiring term life insurance policy and quickly flip it into a lifetime of protection and peace of mind.
It doesn’t get much better than that.
If you’re considering a term life insurance conversion, our FREE life insurance conversion analysis will provide you with a valuable document showing all your available conversion options.
Even if we’re not the agent on the policy, we can still help you!
Being independent, we can convert most of the life insurance companies on the market.
We help consumers on a daily basis by answering any questions and providing the information needed to make the right decision on a term life insurance conversion.
Fill out the form on the right or call us at (888)430-7668 to get started.
