Life almost never goes to plan, so you’ll want to know how life insurance can adapt and grow with your life. Converting your life insurance is one way to ensure you have the right plan for your life currently. Learn about converting term life to whole life insurance.
Can You Convert Term to Whole Life Insurance?
Most term life insurance policies can be converted to whole life. However, these policies will sometimes have a conversion period. You have to decide to convert within this period or you will likely get stuck with your current plan. Luckily, the conversion process is fairly simple and easy. You probably won't even have to pass any new medical exam requirements.
Should You Convert Term to Whole Life?
There are a few reasons you may want to convert a term life insurance policy to a whole life policy. Generally, you would do so because something in your life is not what you thought it would be when you started the policy.
One common situation is when you keep a dependent longer than you thought you would or acquire a new dependent. Usually, term life insurance is designed to coincide with the period that someone is dependent on you to ensure they are taken care of in the case of your death during that period.
But if your situation changes and the period of dependency lasts longer or becomes indefinite, you may want to consider switching to whole life so they will continue to have that assurance.
Converting to whole life may also become necessary if your debt situation is not going according to plan. If you have more debt than expected, whole life insurance can help keep that debt from burdening your loved ones in the event you pass away.
How Much Does It Cost to Convert Term to Whole Life?
Converting will increase your premium, but there often aren't any direct fees. These are details that are determined by your insurance company, though, so check with your agent.
How much your premium is affected depends on a variety of factors. The main variable that determines how much the premiums increase is your age at the time of conversion. Although being older can increase the cost, changes to your health should not affect it, because you typically keep the underwriting class you had on the original plan. How much you decide to convert and what type of permanent life insurance you switch to are also defining factors regarding cost.
