Term life insurance is a great option for individuals who need an affordable option for life insurance. With term life insurance, you get coverage for a period of time such 10, 20 or 30 years. Although term life insurance isn’t permanent, many life insurance companies will allow you to convert your insurance to a permanent policy upon renewal without undergoing another medical exam, as long as you convert before the deadline.
When to Convert Your Term Life Insurance
Much like other financial decisions, determining when you should convert your term life insurance policy is determined by your personal situation. If you have life events that affect your health or your financial situation, then it makes sense to reconsider your life insurance strategy. The following are a few life events that may prompt you to reassess the type of life insurance you need.
- If You Get Sick: Of course, illnesses and other major medical conditions can happen at any time. Even if you are approved for a term life insurance policy, you may find out a few months later that you’ve developed a disease or a chronic illness. If you are facing a situation similar to this, and you are within the timeframe to convert your policy, then you should consider converting your policy.
- If Your Income Increases: Getting a new job is something to be proud of at any stage in your life. If you are fortunate enough to get an increase in your income along with your new job, then you should consider converting your term life insurance policy. With a larger income, your family’s lifestyle will likely change, which may warrant a permanent financial strategy, including permanent life insurance.
When to Get a New Life Insurance Policy
Converting your term life insurance policy may not always be the best solution for you. Again, depending on your personal financial situation, you may find it more beneficial to get a new policy for your family. The following are a few reasons why you may purchase a new policy instead of converting your term policy.
- You Still Have a Major Loan: One of the many benefits of a term life insurance policy is the fact that the death benefit can help families pay off a mortgage or any other type of loan with the death benefit. If you can afford the coverage, you should continue to pay for your term policy while you still have the loan. You can then purchase a permanent life insurance policy for the additional coverage your family needs. By doing this, you lock in a lower rate than you would be eligible for in the future and your family has complete life insurance coverage.
- You Missed the Deadline to Convert: It is possible to miss the deadline for converting your term policy without a medical exam. In this case, you would be required to undergo a medical examination to convert. If you face this situation, you should work with your agent to find the best permanent life insurance policy that meets your needs.
Get personalized advice today. Call The Weimer Group at (877) 791-1707 for more information on Philadelphia life insurance.