Term Life Insurance Article

Converting a Term Life Insurance Policy

Everyone understands the concept of Term Life Insurance Policies and why they should be an important part of your estate planning. Many people do not understand the idea of convertibility when it comes to life insurance. This options, which is available on many term life policies is an excellent option that should be considered prior to purchasing your term life policy.

First, remember that Term Life Insurance Policies are purchased for a predetermined length of time. Common term lengths are five, ten and thirty years. These policies work by paying out a death benefit if the policy holder dies during the term of the policy. But what happens after the policy expires? The death benefits will no longer be available. At this point, you have three options, allows the Term Life Insurance Policy to expire, attempt to re-up the policy or convert it. Allowing the policy to expire is a bad option because you have no life insurance at that point. Trying to re-up the policy can be difficult at best. Many insurance companies will require you to take an additional physical exam to prove that you are insurable. More simply put, you will have to prove you do not have any illnesses that will make you an insurance risk. That leaves converting the policy as the best option.

The option to convert a Term Life Insurance Policy is offered by some insurance companies. This option will allow you to convert your policy to a cash policy. No physical exam will be required. Doing this means that no matter when you pass away, your beneficiaries will receive your death benefits. On the downside, your annual premiums may increase, but this is a great option for people looking to protect the financial well being of their loved ones in the event of their death.

This option is especially helpful if your health is deteriorating during the term of your Term Life Insurance Policy. Remember that you will most likely be required to provide proof of insurability if you would like to renew your term policy. If you have experiences an illness or have been diagnosed with certain diseases, you may not be eligible to renew your policy. By converting your Term Life Insurance Policy to a Cash-Value Policy, you will ensure continued insurance coverage without risking a lapse in coverage that may lead to you being considered uninsurable.

Term Life Insurance Policy is an excellent way to protect your family in the event of your death. They provide much need cash assistance during that difficult period. It is important to remember that as you age, you may not always be able to renew your policy. It is an excellent idea to consider converting your Term Life Insurance Policy to a cash value policy. Discuss the matter with your insurance broker to find out if your current policy has the option and what the change in your premiums would be. Converting your policy may be the ticket for continue insurance coverage and protection.

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