Having the proper life insurance policy is very important in order to protect loved ones in the event of an unexpected tragedy. A difficult part is deciding what the proper life insurance policy is for you. While at one point in your life, term life insurance made sense, now it may seem like it isn't the best option. Maybe at this point in time, having a permanent life insurance policy is a better option. If you find yourself in this dilemma, the following may help you make a decision on whether or not you should convert your term life insurance policy into a whole life insurance policy.
Is it Convertible?
Before you consider converting your term life policy to a whole life policy, you must first find out if it is convertible. Depending on the policy, there is a chance that you will not be able to convert to a whole life plan. If it is an older policy, it is more likely unconvertible as newer policies are more flexible to make changes.
Have You Developed an Illness?
Have you developed an illness that may be life threatening at some point? If so, most insurance companies will deny you coverage due to a pre-existing condition. Most insurance companies do not provide coverage for those with a pre-existing condition because the risk is too high. If you had a term life policy, you would be able to convert it to a whole life policy where the benefit never expires because you had already been insured. This is a way to get continued coverage if you have developed a condition that will make life insurance a necessity in the future.
Would You Like More Time?
When many people purchase a term life insurance plan, they make a decision on the number of years they would like to be covered, maybe 15 or 20 years to cover a child until they are an adult. However, life is full of surprises, and what you once thought was the right amount of years has turned out to be too short of time. Maybe you had more children, or have new dependents. You also could have new debt that you want to cover in the event something happens to you. If that is the case, converting to a whole life policy is crucial as the policy doesn't end until it is cancelled, or the policy holder passes away.
Want to Build Cash Value?
A term policy and a whole life policy can be compared to renting and owning. A term policy often costs less than a whole life policy, however you only have coverage for a limited period of time, like renting an apartment. A whole life policy lasts as long as you would like it to last, and the money that you use to pay for it will collect and build a cash value or become an asset, much like buying a house. Another benefit is that after a certain amount of time, you can take out a loan from your whole life policy, essentially borrowing money from yourself.
For more information regarding what life insurance options are available to you, read our previous blog, “What Are My Life Insurance Options?“ Whether you are purchasing life insurance for the first time, looking for better coverage or are interested in learning more about other types of insurance available to you, we can help! Visit our website at www.mhginsurance.com or speak with an Insurance Specialist at 954 828 1819.