Convertible Term Life Insurance

 
If you buy a convertible term life insurance policy, you can continue your current coverage for your entire lifetime.
 

What is Renewable Term Life Insurance?What is Renewable Term Life Insurance?

Renewable term life insurance definition: Renewable term life insurance is an automatic option that allows you to extend your current coverage with an annually increasing rate after your initial term expires.

One of the most significant renewable term life insurance advantages is continuing coverage even if you have developed a health issue during the initial policy term.

A disadvantage of letting your policy renew each year is that it may eventually become cost-prohibitive in just a few short years. If you do not wish to continue, you can cancel your policy with your carrier.

Convertible Term Life Insurance

What is Convertible Term Life Insurance?

Convertible term life insurance definition: A term life conversion option allows active renewable term life insurance policyholders to extend their coverage into a permanent policy.

A life insurance conversion option gives you the right to convert your term life insurance into a fixed-rate permanent policy with no medical exam or health questions.

Companies often allow policyholders to convert until the end of their term or to a specified age.

Life insurance companies will maintain your original health rating and use your current age to establish the cost of coverage.

So, if you have developed any health problems during the policy term, your rate classification will not change with your new permanent policy.

Your converted policy will be much cheaper in the long run than just letting the policy renew at a higher rate each year.

term conversion Partial or Full Life Insurance Conversion

A convertible term life insurance policy gives you two different options:

  1. The conversion privilege to convert a portion of the original term policy.
  2. The conversion privilege to convert the total amount of the initial term policy.

 Partial Term Life Conversion

Since term life insurance is cheaper than permanent insurance, many policyholders save money by converting only a portion of their coverage.

Since the death benefit is for a smaller amount than their original term policy, many folks can keep the remaining balance of any term coverage.

Partial Conversion Case Study:

Frank buys a $500,000 10-year convertible term life insurance policy.

During his initial term, he develops a few health issues that prevent him from qualifying for coverage.

He extends his coverage by electing a term life conversion for a new $250,000 universal life policy.

He is also allowed to keep the remaining $250,000 of term coverage for the balance of his contract.

  Full Term Life Conversion

Many wealthy policyholders convert their entire term into permanent coverage to provide for their families when they eventually pass away.

Full Conversion Case Study:

Sandy buys a $500,000 20-year convertible term life insurance policy.

Sandy is planning on retiring soon and has a very successful small business.

Her only child does not want to take over the company when she retires.

So, she elects to extend the entire amount of her current term coverage to provide for her child.

It is easy to convert the term life to whole life, giving her a $500,000 lump sum for her child when she dies.

Then, she can live off the proceeds from the sale of her company without worrying about her child’s future.

Term Life Conversion Quotesconvertible term life

How a Life Insurance Conversion Works:

  • We gather a few details about your existing policy
  • We find when your term life insurance conversion period ends
  • We customize a plan which meets your needs and budget
  • We extend the duration of your current policy to the age you specify
  • We can also reduce your death benefit if you need to save money
  • We don’t require any medical exam or ask any medical questions
  • We assist you with the necessary paperwork
  • Please do not hesitate to call us at 1-877-249-1358

Easy Life Insurance Conversion Process

 1.

We obtain a few details about your current term life insurance policy, needs, and budget.

2.

We research and discuss each available conversion option on your current term life policy.

3.

We assist you with the timely processing of all the needed paperwork and required signatures.

Life Insurance ConversionConvertible Term Life Insurance Companies

Affordable Life USA can explore if a life insurance conversion is financially viable for you with most insurance companies.

We understand the specific rules and timelines you must follow to switch your term coverage into a permanent life insurance policy without doing a medical exam. 

We have provided you with conversion rules that many popular life insurance companies must follow.

Click on your company to jump to its conversion options:

Over the years, AIG has purchased many insurance companies, including Old Line Life, United States Life of New York, and American General.

The life insurance division of AIG is called American General, rated A (Excellent) from Am Best.

Many folks who have purchased an AIG/American General life insurance plan have bought their SelectA-Term product.

You can switch to a permanent life insurance policy with American General until age 70.

American General term insurance policyholders have several conversion options available depending on the number of years their policy has been active.

AIG policyholders can always convert from term to current assumption universal life by buying the Protection Extend IUL policy.

People can always switch from term to whole life to pay for their final expenses by purchasing the American Elite Whole Life policy.

The Secure Lifetime GUL is a guaranteed universal life policy typically only available for conversion during the term policy’s first 8-10 years.

Legal and General, headquartered in London, is the parent company of Banner Life and William Penn Life.

With Banner and William Penn, conversion options may be requested during the guaranteed level premium period up to age 70, whichever comes first.

Banner Life policies issued over the age of 66 can only be changed during the first five years of the policy.

If you replace your term with permanent coverage, you will end up with a universal life policy called Banner Life’s Step Up UL.

Step Up UL offers a guaranteed minimum death benefit, and you can never lose your policy as long as your premiums are paid.

Just to let you know, Genworth Life Insurance Company no longer sells any new life insurance coverage, and many agents no longer represent Genworth.

We often assist existing Genworth and First Colony term life clients who no longer have an active agent.

Most Genworth clients own a Colony Term UL or a Sure Term policy and have decent replacement options after their initial term period ends. 

You may exchange a portion or your entire term policy for any available Genworth universal life policy.

The conversion option is available at any premium due date during the initial period or to the insured’s attained age of 75, whichever comes first.

Conversion is available for up to one year with the Sure Term 10-year policies with issue ages of 75-80 and the Sure Term 15-year policies with an issue age of 75. 

John Hancock allows you to transfer a portion or all of your term life to permanent coverage.

With the John Hancock term insurance, you can exchange your policy up to the end of your level term period or the policy anniversary nearest the age of 70.

In the first four years, you can switch your term policy to any permanent life product available within John Hancock’s portfolio.

You can convert to specific products only used for conversion after five years or until the end of the level term duration.

Lincoln National offers a strong portfolio of term and permanent life insurance products.

Lincoln Financial is a well-capitalized company that has also purchased many smaller life insurance carriers.

  • Aetna – ING Life & Annuity
  • Jefferson Pilot
  • Alexander Hamilton Life
  • Connecticut General Life Insurance
  • CHUBB
  • First Penn-Pacific Life
  • Guarantee Life
  • Kentucky Central Life Insurance

We need to look into your specific policy to evaluate the conversion rules of each of these companies.

These rules often follow company-specific minimum face amounts, a time-sensitive conversion period, and which term plan you initially purchased.

Lincoln Financial allows you to convert a portion or entire face amount until the age of 70 or the end of your term.

Lincoln has changed their conversion options many times over the years. So, we need to check the best conversion options available to you.

Survivorship Life Conversion 

Lincoln permits two individual term policies to be rolled or switched into one survivorship policy.

If a husband and a wife both have Lincoln term plans, they can even convert to a Second to Die policy, provided that the death benefit being converted is the same.

Mass Mutual term life is reasonable, and your premium payments remain the same for between one and twenty years. 

If your needs change, many Mass Mutual term policies also give you the right to exchange for a permanent life insurance policy.

Term Conversion Credit

What is a conversion credit? Some companies provide an incentive or credit when converting term life insurance to permanent coverage.

Mass Mutual convertible term life insurance allows you to add cash value or apply a credit towards the initial premium payment for the new permanent coverage.

A term conversion credit is available for the Convertible Annual, Renewable Term, and Vantage Term products.

A term conversion credit is only available for term life insurance products named above and only when exchanged for the Whole Life Legacy 100SM or the Whole Life Legacy 20 PaySM.

MetLife transitioned its life insurance business into Brighthouse Financial a few years ago.  

If you own a MetLife convertible term life insurance policy, you can extend coverage for your entire term duration up to the age of 70.

If your policy was issued over 65, you could convert your life insurance policy during the first five years. 

Metlife only allows one conversion option called the Premier Accumulator Universal Life.

The Premier Accumulator universal life insurance is expensive without any premium guarantees.

Met Life Group Coverage

MetLife is also one of the largest group insurance providers too. As a group plan member, you can port your life insurance policy after leaving or retiring from your employer.

When porting your policy, you will continue paying for the group term life policy that your company provided.

When converting, you are switching the term life that your company offered to permanent coverage. You also find information and learn more about porting by visiting this MetLife webpage.

The conversion options available will depend on which underwriting process you initially went through for your original United of Omaha term policy.

Term Life Express

The Term Life Express does not require an exam and is ideal for someone that needs less than a $300,000 death benefit.     

With Term Life Express, you will need to wait until you have had the policy for at least two years before conducting a conversion option.

After two years, you can convert your policy either before the term length ends or before you reach your 70th birthday.

You will also have only two permanent policies to convert into:

  • Guaranteed Universal Life Express
  • Living Promise Whole Life

Term Life Answers

The Term Life Answers is a fully underwritten policy purchased by folks looking for more than $300,000 in coverage.

This term plan offers more affordable rates if you qualify after a brief medical exam. The duration of the Term Life Answers you currently have will dictate your conversion options.

  • 10-year term – You can convert the 10-year policy within the first two policy years or up to age 75, whichever is the latter of the two.
  • 15 or 20-year Term – If you have either a 15 or 20, you have until you reach age 75 to convert your policy.
  • 30-Year Term – If you have a 30-year term, you have only the first 20 years of the term policy to switch it to a universal life policy.

Term Life Answers allow you to exchange a part or all of your term policy for any permanent product offered by Mutual Of Omaha at the time of conversion.

If you are a term client of North American, you most likely have a product called Advantage Term.

You can convert your ten or 20-year Advantage Term plan any time during the level premium period of the policy or through age 74, whichever is earlier.

However, you must convert by the age of 69 if you own the 30-year term plan. The conversion period is never less than five years, regardless of the issue age.

North American’s Custom Guarantee UL allows policyholders to convert a portion of their entire death benefit.

If you only need a small policy, North American offers affordable life insurance for seniors with death benefits as low as $25,000.

Unlike most companies, the Principal term life plans come with two exchange options.

 Standard Policy Conversion Privilege

The standard policy allows you to switch from term to permanent insurance based on the earlier set conversion period or the policy anniversary nearest your age of 70.

  Here are the set conversion periods:

  • 10-Year Term: first seven policy years
  • 15-Year Term: first twelve policy years
  • 20-Year Term: first fifteen policy years
  • 30-Year Term: first twenty policy years

 Conversion Extension Rider

The Conversion Extension Rider comes with an additional cost and is only available when you initially purchase your policy.

The cost is because the rider extends the conversion period to the earliest of the entire term period and the policy anniversary nearest your age of 70.

Here are the extended conversion periods:

  • 10-Year Term: Until age 62, you can convert for ten years or to age 70.
  • 15-Year Term: Until age 57, you can convert for 15 years or to age 70.
  • 20-Year Term: Until age 54, you can convert for 20 years or to age 70.
  • 30-Year Term: Until age 49, you can convert for 30 years or to age 70.

You can extend your entire death benefit or a portion of your coverage with the Principal.

Protective has also purchased many smaller insurers and now provides conversion options for many companies.

  • West Coast Life Insurance Conversion
  • Empire General Insurance Conversion
  • Chase Term Life  Insurance Conversion
  • Kemper Life Term Life Conversion
  • Protective Life and Annuity Insurance Company  (New York only)
  • MONY Life Insurance Company

     

The term conversion rights for Protective Life expire by the insured’s 70th birthday or two years before the level term period ends, whichever comes first.

Protective’s term can be converted into various products in the first five years, including the best-selling guaranteed lifetime policy called Advantage Choice.

After five years, you can only switch to more expensive current assumption plans like the ProClassic Legacy UL and Non-Par Whole Life.

ProClassic Legacy UL does not offer a lifetime guarantee but can be structured to last for your entire lifetime.

Protective Non-Par Whole Life is a more expensive option and is guaranteed for your entire lifetime.

A small whole-life policy is a popular option for seniors needing help paying for final expenses.

Prudential has two different term insurance portfolios, Term Essential and Term Elite, with varying conversion options for each product. 

Term Essential 

Term Essential is Prudential’s most affordable term plan and is convertible to any permanent coverage up to age 65.

Plus, they will always allow you five years to switch from term to permanent coverage. So, if you purchased a policy on your 64th birthday, you can also convert up to the age of 69.

Term Elite 

Term Elite is also convertible from the first policy anniversary to age 65.

Term Elite also offers term conversion credits. So, if you decide to switch over within the first five policy years, you will receive credit on your first year’s universal life premium.

Survivorship Life 

Prudential allows two individual term policies to be exchanged for one Survivorship Universal Life policy.

So, a husband and wife can transfer two individual term policies into one Survivorship Life Insurance Policy.

Prudential is also one of the country’s largest group life insurance providers. Members can learn more about porting and converting Prudential group coverage by clicking here.

Transamerica has two different term policies, the Trendsetter Super and the Trendsetter LB, with standard term lengths ranging from 10 to 30 years.

You can convert a portion or all term coverage up to the earlier of the end of the initial level premium period or at age 70 with both policies.

You could change from term to permanent coverage with Transamerica until age 75 if you were in excellent health when you applied.

Current term policyholders can switch to the TransACE CV, a reasonably priced guaranteed universal life product.

Voya term policies were previously issued under the name of its subsidiary called the Reliastar Life Insurance Company.

Voya Financial does not sell new life insurance to new clients but will honor all death benefits to existing policyholders. 

If you have an existing term life policy with Reliastar, you will still be able to change a portion or all of your current coverage to universal life.

Voya has two current assumption products and does not offer universal life products with lifetime guarantees.

The Voya current assumption products are VOYA Universal Life CV and Indexed Universal Life Global Choice.

Term Life ConversionWhen Should I Buy New Coverage?

As you realize, converting term to permanent coverage will be more expensive than buying a new term policy.

Affordable Life US makes comparing different types of life insurance coverage a breeze!

People in good health should always compare new quotes with the conversion options available with their existing policy.

Comparing different term life insurance plans can help you evaluate the prices and find the most appropriate policy for your needs and budget.

Many healthy insurance buyers should qualify for new coverage with a simple no-medical exam underwriting process.

However, many life insurance carriers require all applicants to do a fast insurance physical to qualify for new coverage.

Ultimately, your decision will depend on how much life insurance you need, your unique financial situation, and your specific stage in life.

Please always confirm that you are approved with a new policy before canceling life insurance with your current carrier.

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alternatives to consider

A convertible term policy provides you with the coverage you need at an affordable price and allows you to convert to a permanent policy if your needs change.

You may still have additional options if you can not afford a partial or total life insurance conversion.  

  • Accelerated death benefits: Many policies offer living benefit riders that allow cash advances against your death benefit if you are terminally ill.
  • Gift your policy to charity: Your life insurance policy ownership is transferred as a charitable gift, requiring the charity to make all future payments.
  • Sell your policy: You may sell your policy to a life settlement company that pays the premiums and collects the death benefit when you die.

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    Its founding member, Eric Van Haaften, has sold life insurance for over 33 years. Eric has been featured in renowned publications such as Time, Newsweek, Us News, and The Wall Street Journal. 

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