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Learn more about converting your life insurance policy with SelectQuote.
There can be benefits to converting your term policy to a whole policy, but is it the right option for you? We can help you weigh out your options and make sure you’re getting the coverage you need.
Can I convert my term life insurance policy to whole life insurance?
Typically you can convert a term life insurance policy to a whole life insurance policy, but an additional question to consider is should you convert your term life policy to a whole life policy? In the end, it comes down to figuring out what’s best for you and your family.
Why You Might Consider Converting Your Term Life Insurance Policy to Whole Life Insurance
You might think you won’t need life insurance coverage by the time your term policy expires—generally 10-30 years following purchase—because your dependents aren’t relying on your income anymore and you have paid off the majority of your debt. However, there are benefits to always having some form of life insurance policy, including peace of mind that you and your family are secured financially if the unexpected were to happen. Whether it’s converting your term policy into a whole life policy or shopping for a new term coverage, considering all your options is crucial and we can easily help you determine which is right for you.
How to Convert Your Term Life Insurance Policy to Whole Life Insurance
Many term life insurance policies will include a built-in conversion rider that allows you to simply make the switch to a whole life insurance policy, but you can usually only convert during the specified conversion period. The conversion period typically starts two to five years after your policy is purchased and ends either at the end of your term or when you hit a certain age. The length and dates of conversion periods will vary from company to company.
Partial Conversions
Some insurance companies may also offer partial conversions in the instance you want to extend your coverage but don’t need as large of a death benefit. Another reason you might consider a partial term conversion is if you’re interested in converting, but wanted to offset the costs and secure a more affordable whole life insurance premium.
Key Factors to Converting Life Insurance Policies
There can be many benefits to converting your term life insurance policy to a whole life insurance policy, including:
Skipping the Medical Exam – Since you already completed a medical exam for your existing term policy, there is typically no medical exam required when converting and you shouldn’t have to go through the underwriting process again. This could vary from policy-to-policy.
Partial Conversion – If your insurance company allows it, you might be able to convert just a portion of your term policy into a whole policy.
Cash Value – With a permanent life insurance policy, you have the opportunity to build a cash value alongside the death benefit.
Lifetime Coverage – As the name suggests, permanent life insurance provides coverage for the rest of your life, which can be an added benefit for those looking to provide financial support to their family when they pass.
What to Consider When Converting Life Insurance Policies
In addition to benefits, there are also points that should be considered when looking to convert your term life insurance policy into a whole life insurance policy:
Deadline to Convert – If you’re interested in converting your term policy to a whole policy, it will likely have to be completed during the conversion period. The conversion period typically started two to five years after the policy starts and ends at the end of the term or when you hit a certain age.
Limited Choice of Permanent Policies – Many providers will allow you to convert a term policy into any kind of permanent policy, but there are some instances where you’ll only have the option for a whole life policy.
Higher Premiums – As the cost of whole life insurance is higher than the cost of term life insurance, there is a good chance your premium will increase once you convert.
Purchasing the Right Life Insurance For You
While your reasons for needing life insurance might change over time, the process of navigating the ins and outs of your options still doesn’t have to be overwhelming. It’s our job to make sure you find the right life insurance for your needs, whether that’s term life insurance or whole life insurance. Let us help you find the right coverage for you in just minutes.
