Many term life insurance policies include a conversion feature that allows you to convert some or all of your term coverage to a permanent life insurance policy without undergoing a new medical exam or health review. This means you can secure permanent coverage at your current health classification, even if your health has changed since you originally purchased the term policy. However, conversion terms vary significantly by carrier, so it is important to understand your specific policy's conversion provisions.
Common conversion limitations include a conversion deadline (often before a specified age, such as 65, or before a certain number of years into the term), restrictions on which permanent products are available for conversion, and the requirement that the converted policy's premiums be based on your attained age at conversion rather than your original issue age. Some carriers restrict conversion to their own permanent products, while others offer broader options.
The premium for the converted permanent policy will be higher than the term premium you were paying, for two reasons: permanent coverage costs more per dollar of death benefit than term coverage, and the premium is based on your current (older) age. However, the key advantage is that no new medical underwriting is required, making conversion particularly valuable for individuals whose health has declined since they purchased the term policy.
Conversion can be a strategic financial move, especially as you transition from temporary income replacement needs to permanent planning goals like estate protection and legacy building. Some policyholders convert a portion of their term coverage to permanent while maintaining the remaining term coverage, creating a blend that addresses both temporary and permanent needs. A licensed agent in our network can help you evaluate your conversion options and timing. All converted coverage terms are determined by the issuing carrier.