How and Why to Convert Term Life to Permanent Life Insurance

Switching from term life insurance to permanent life insurance can be a wise decision for many. While term life insurance typically offers coverage for a set period, permanent life insurance can provide lifelong protection along with extra perks like cash value growth. Whether you’re aiming to improve your financial strategy, ensure long-term coverage or take advantage of the cash value feature, it’s crucial to understand the conversion process and its benefits.

Steps to Convert Term Life to Permanent Life Insurance

The following steps may be used to convert term life insurance to permanent life insurance:

1. Review your policy. Verify whether your term life insurance policy has a conversion option. This feature enables you to switch your term policy to a permanent one.
2. Consult with your insurance agent or financial advisor. They can give you detailed information on the different types of permanent life insurance.
3. Choose the right permanent policy. Select the type of permanent life insurance that best suits you based on your financial goals and needs. Each type has different features, benefits and costs.
4. Complete the conversion process. Fill out the necessary paperwork to convert your policy. Your insurance company will guide you through the process, helping to ensure a smooth transition.

Why Convert to Permanent Life Insurance

The following are some reasons you might consider switching to a permanent life insurance policy:

• Lifelong coverage—Unlike term life insurance, which expires after a set period, permanent life insurance offers coverage for your entire life as long as premiums are paid.

• Cash value accumulation— Permanent life insurance policies can accumulate cash value over time, which can be borrowed against or withdrawn. This can provide a financial resource for emergencies, education or retirement.

• Estate planning—Permanent life insurance can help cover estate taxes, ensuring your beneficiaries receive the maximum benefit from your estate.

• Fixed premiums— With permanent life insurance, your premiums usually stay constant for the duration of the policy, offering predictability and stability in your financial planning.

Learn More

Contact Reinholdt & O’Harra Insurance to learn more about your life insurance options.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.