Most life insurance Companies”  offer renewability and conversion privileges in their term life insurance policies.  The renewability provision allows policyholders to renew a term policy at the end of the term period and annually thereafter.  Most of our clients find the premiums at renewal to be cost-prohibitive and either purchase a new term policy, if in good health,  or they convert their current policy to a permanent one if lifetime coverage is required (or if health issues make purchasing a new policy difficult).

Aside from locking in premiums for the rest of one’s life, one of the main benefits of term life conversion is that you convert at the health class at which you were originally rated.  Therefore, if your health has declined since you first purchased your term life insurance policy, it won’t be a factor in the new policy.

Most term conversions are attained age conversions.  In an attained age conversion, the policy owner simply exchanges his/her existing term life policy for a permanent one (whole life or universal life, depending on the company) at his/her age at the time of the conversion.  For example, a 45 year old purchased a 20 year term policy when he was 30.  He now wants to convert his term policy to a permanent one.  The premiums for his term life insurance policy were based on his age when he purchased his policy (30).  However, the premiums for the permanent policy he is converting to will be based on his age at conversion (45).