Many life insurance companies offer you a conversion privilege with your term life insurance policy. This means you can exchange or convert your term insurance policy for a whole life insurance policy with the same death benefit amount. In most cases you won’t have to go through a medical exam or answer any medical questions to qualify for the new policy. This is a very beneficial privilege to have if you are ever in the position where you need it.
Here’s how it works. Let’s say you get a 30 year term policy when you are 35 years old. At the age of 64, when you have 1 year left with your policy, you are diagnosed with cancer or another serious health issue. This can put you in the position where your policy can end and you will not be able to get any more life insurance coverage because you won’t be able to pass another medical exam. With the conversion privilege, you can convert your term policy to a permanent policy and you will have insurance for the rest of your life.
Keep in mind that the premiums will be higher, but you can reduce the death benefit if you need to in order to keep the premiums in your budget. As you can see, the conversion privilege provides a level of protection for the insured. All carriers have their own requirements for when and how the conversion privilege can be used so be sure to ask your agent and the insurance company how your policy works.
{ 0 comments }