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If you received a letter or email that your car insurance policy expired, what would you do? You would probably renew your policy as soon as possible to make sure you have the right coverage.

Why should your life insurance protection be any different?

When you purchased your term life insurance policy you took an important step to protect what you care about most. And, as the current term of your coverage approaches expiration, you may find yourself with different needs that extend well into the future.

Key Benefits of Both Term and Permanent Insurance


You have a desire to have a death benefit that you cannot outlive.

You have an interest in having living benefit riders such as critical, and chronic illness riders beyond the expiration of your term insurance.

You have a desire to potentially supplement your various income sources available to you in retirement 

Your health is not as good as it was when purchasing your term policy and you desire to continue your death benefit beyond your term contract, while locking in the health rating you received years earlier.

You want to build value in your life insurance policy often referred to as a cash surrender value that you could access throughout your lifetime for emergencies or opportunities.

You're financially better off than when you bought your term life policy so you have more to protect

How to Convert Term Life to Permanent Life

Converting a qualified term life insurance to an available permanent policy is one of the easiest transactions you will experience.  Aside from understanding all of your options, the challenge or anxiety that traditionally comes with purchasing life insurance is the underwriting process in which the insurance company evaluates whether insuring you would be a safe bet and at what health rating you should be classified.  The beautiful thing with converting term insurance is that there is no underwriting for health if converted within the convertible period of your existing policy.  In layman's terms, this means that even if you have been diagnosed with something like diabetes, if your term insurance has a convertible option, you will be able to retain that same health rating that you received at the time you purchased your existing term life insurance.  This is often a better rating than you may receive today if you had to go through traditional underwriting. 

The Cost of Converting

The cost of converting your term insurance varies based on the age and size of the death benefit you choose to convert.  It is important to know that many term policies allow you to convert some or all of your term, often in stages if you prefer.  This makes the conversion process much more manageable.  The thing to always remember about term insurance vs permanent insurance is that term insurance is simply considered a cost unless you die, at which point the death benefit is paid out to your beneficiary and becomes an asset to them.  With a properly designed permanent life insurance policy, that death benefit is going to pay out to your beneficiary regardless of when you die but in addition, it can be considered an asset because it can build cash surrender value today.  In fact many people are unaware of how often life insurance is used as collateral in various business dealing or in order to secure favorable loans.  

Questions You Should Ask If You’re Thinking of Converting

  • Would I value future potential tax-free income ?
  • Is it possible I will need life insurance beyond the term of my present policy?
  • How much death benefit do I need? 
  • Would I value being approved for a permanent life insurance policy without proving my health is just as good as the day I purchased my term life policy?
  • Are there term conversion credits that could help offset the cost of my new permanent life insurance policy?  
  • Do I believe taxes are likely to go up in the future?
  • Will I have enough money to retire at the expiration of my term life insurance policy?
  • Have I had another child or grandchildren since purchasing my term life insurance policy?
  • Have I properly planned for a potential care needed in the future?
  • Would I be able to pay my bills and fund my retirement if I had a critical or chronic illness? 
  • Do I have a large 401(k) or 403(b) balance?

Schedule a Term Policy Review Today

Thank you!

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1.  Living Benefits are provided by no additional premium Accelerated Benefit Riders.  Riders are supplemental benefits that can be added to a life insurance policy and are not suitable unless you also have a need for life insurance.  Riders are optional and may not be available in all states or on all products.  This is not a solicitation of any specific insurance policy.

2.  Policy loans and withdrawals reduce the policy’s cash value and death benefit and may result in a taxable event. Withdrawals up to the basis paid into the contract and loans thereafter will not create an immediate taxable event, but substantial tax ramifications could result upon contract lapse or surrender. Surrender charges may reduce the policy's cash value in early years.