Convertible term life insurance is a policy that allows you change from term life insurance to whole life or universal life insurance. This change does not require any medical tests. Term life insurance is a policy that provides coverage for a period agreed on in your life insurance contract. Whole life or universal life insurance provides coverage for the rest of your life.
From the explanations above, you can see that convertible term life insurance is a policy that allows you change from a temporary life insurance policy to a permanent policy. However, when you change your life insurance policy, your policy still has the same value.
Here, we will look at the pros and cons of a convertible term life insurance.
Pros of convertible term life insurance
- You can have an affordable term life insurance policy until you can afford to pay for a permanent insurance policy.
- With convertible term life insurance, you do not need medical tests to change your insurance policy. Hence, there is less risk of you being denied insurance because of your health.
- If there is a need, you can make your life insurance permanent after a period.
Cons of convertible term life insurance
- You can only change your life insurance policy after a few years; this detail will be in your life insurance contract.
- Your premium will get higher when you convert from term life insurance to whole life insurance.
- You may be unable to convert your insurance policy if you wait too long. After a certain age, conversion is no longer possible.
- You cannot convert to term life insurance again after changing to a permanent life insurance plan.