Convert Term to Whole Life Insurance Best Guide

Convert Term to Whole Life Insurance Best Guide

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Convertible term insurance is like term insurance but with an additional benefit.

The policyholder has a ‘conversion option’ which means they can convert the cover under the policy into a new policy, running for a longer period of time, without the insured person having to undergo a medical examination or supply evidence of good health at the time of the conversion.

The cost of this cover will depend on several factors such as the level of cover required and the age and life expectancy of the policyholder at the time of the conversion.

The conversion feature is a good idea, especially if you are the type of person aiming for a better future.


Converting Term Life to Whole life – Convert Term to Whole Life Insurance Best Guide


Converting from term to permanent life insurance means you’re converting all or some of your term life insurance into permanent policies, like whole life or universal life.

While most policies include the option to convert, you may be able to add it as a rider if it isn’t.

So, even if you decide to buy term life insurance now, you have the option to convert it to a permanent life insurance policy later.

Because permanent life insurance is based on your income, converting from a term to a permanent life insurance policy can be an affordable option.

In other words, as your income increases and your protection needs change, your life insurance strategy can change with you by potentially converting to a whole life policy later.

What is Partial Term Conversion?

A partial term conversion means taking a portion of your term policy and converting it to whole life.

If you do this, you will have one term life and one whole life insurance or two separate insurance policies.

Convertible Term Life Insurance

How Does a Term Policy Conversion to Whole Life Insurance works?

Term conversion to whole life has an expiration date.

The expiration date depends on the insurance product and the company.

You must convert your term policy to whole life before the expiration date.

You don’t need to go through the underwriting again, but they will consider your age.

You can convert your plan based on your current age or the age when you purchased your term policy (original age).

Some people might argue that you don’t need to convert to term life insurance. If you have had a term life insurance policy and now realize that you actually prefer a permanent life policy, you can just cancel your term life policy, i.e.. stop paying premiums and buy a permanent life policy. Why do you need to convert?

When you realize you actually need permanent life insurance, you are older, and your health condition might not be as good as you were when you buy the term life policy.

Buying a term life insurance policy when you were young is a very good decision since it helps lock in your insurability when you are young and in good health condition.

When you get older and want to have a permanent life policy, you can just convert your term life with the same insurance company and don’t need to have another medical exam.

Convert Term Life Insurance 

Most Term Life Insurance policies are convertible.

This means you can convert or exchange your Term Life policy for a permanent life policy such as Whole Life or Universal Life Insurance with no additional underwriting.

In other words, there is no medical exam you must pass.

Your insurability is preserved no matter what your health situation is.

However, Term Life Insurance has a conversion deadline.

It is important to be aware of how long you have to convert your policy.

Many young, healthy policyholders choose a convertible term insurance policy initially because of the low-cost premiums and basic coverage that it affords their family.

At some point, many of these consumers decide to upgrade their policy to a whole life policy for a stable policy that will cover a mature family’s needs.

Life Insurance Conversion

 Pros and Cons of Converting Term Life to Whole Life

Although converting term life to whole life can make sense in some situations, it’s not a one-size-fits-all solution.

Lots of families naturally outgrow a need for life insurance as children grow up and form their own households.

Some people view the cash value element of a permanent policy as part of their wealth management strategy, but others may find more effective ways to grow their savings.

Consider potential drawbacks and alternative options before going for term life conversion as a default choice.


Conversion Period Life Insurance


A term conversion means converting some or all of your term life insurance into a whole life insurance policy.

This option is available if you want whole life insurance.

Conversion options are typically included in your plan for free.

Term conversion can be done without considering your health condition if you convert before the specified deadline. It can be a certain age somewhere between 65 and 70 depending on the company.

There will be a deadline for when you must convert if you want to change the term policy to permanent life insurance without providing health information.

Understand the convertibility features of term life before you buy.

Don’t wait too long if you want to convert your policy to your whole life.

Premiums are based on age, and it is bound to increase as you grow older.

The longer you wait, the higher the premium you’ll pay for a whole life insurance policy when you convert.

If it becomes apparent early on that you will need to maintain coverage beyond the guaranteed period, you should consider converting earlier than near the end of the term.

Convertible Whole Life Policy – Convert Term to Whole Life Insurance Best Guide

There is a special clause within a term life agreement that allows the policyholder to convert it into permanent.

However, it is not always the case. It still depends on the insurer.

So, it is better to ask your insurance provider upfront about it.

Conversion is possible if it is done at the right time and age. Think of it as like leasing the insurance then buying it afterward.

Also, having a conversion feature may add to the monthly premium, but it is all worth it.

You can do it without the need to undergo another qualifying stage and medical examinations. According to statistics, there is only 2% of term life policyholders take advantage of the conversion period.

It is true because most insureds lack information about it.

Also, most insurance companies do not discuss this clause with their client.

For a written policy without the conversion feature, you need to face an expiring policy and costlier renewal because of your current health condition.

Also, you need to again go through a medical exam that will expose your true health condition.

Even if you cannot afford permanent insurance today, life changes can give you the reason for conversion in the future.

Converting Term to Whole Life Insurance 

Convert part or all your term policy to a permanent policy.

Most term policies come with what is called a conversion privilege.

At any time up to a certain age, the policyholder has the right to convert part or all the death benefit to whole life or universal life contract.

If a policyholder exercises this privilege, they are not subject to any new underwriting or medical examinations- it is a condition of the original contract and is simply a matter of completing paperwork.

If this conversion is completed, the policyholder will be treated with the same health class that they got at the time they purchased the original term policy, but it will be priced based on their age at the time of conversion.

Converting the policy is a matter of completing and submitting conversion paperwork.

You don’t need to take another medical exam.

The permanent policy premiums are based on the rating you received when you applied for the initial policy (how do life insurance companies assess your risk?), even if you’ve developed health issues since then.

Your age will affect your new permanent policy rates, though, meaning that the older you are when you convert, the higher the premiums will be.

How is Convertible Term Life is Different from Renewable Term Insurance?

Sometimes insurance companies will offer renewable term insurance, but this is not the same as convertible term insurance. There are two types of renewable terms:

  • Annual renewable term: the policy renews every year at an increased premium.
  • Renewable term insurance: you can get another term life insurance policy when the first one expires.

The annual renewable term is usually short-term insurance. If you want to hang onto it, the policy premiums are similar to ten-year term insurance.

Renewable insurance just means you can get another policy. This may be less expensive, especially at first, but keep in mind that if and when you renew, you’ll be 10, 20, or 30 years older. Premiums will be much higher, even for term insurance.

Shopping for Convertible Term Insurance


Since most term life insurance can be converted to permanent life insurance, you can shop for a policy with many different insurance companies.

Contact us today to review your best option.


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