Most quality term life insurance policies will have several options to convert to a permanent policy.
It is important to know, when you are issued a term life policy, what that company could offer you at that time. Policies may change in the future due to federal and state regulations, company policy types and forms, but policies that offer only one or no options is a tell tale sign for you to avoid!
When converting a term life insurance policy, these are the main things to consider:
- What can you afford based on income, other savings and liquid assets?
- Can some assets be used to fund premiums paid up front, without affecting your lifestyle?
- How long do you want coverage to remain in effect?
- What is your goal - the amount needed to cover future obligations, such as mortgage, business opportunities, funerals, or family income needs?
- Is a spouse or family member on your term policy? If so, discover other options for them as well.
The process to convert your policy will be much easier than creating a brand new permanent policy. There are no medical exams and your premiums will be guaranteed, based on the first date you obtained a term policy! So, if you have any new medical issues when converting, this will not be factored in.
You may be able to keep part of your term insurance policy and convert the desired amount to permanent insurance as well. The whole process will take less than 30 minutes of your time- much less than buying a new cell phone at a store!