Should You Renew Term Policies or Convert?

Should You Renew Term Policies or Convert?

Dec 09, 2019

Most term (or temporary) life insurance is convertible. That means you can make the coverage last your entire life by converting some or all of it to a permanent policy, such as whole life insurance. And you can convert it without taking another medical exam or answering health questions, as long as you do so within a certain time frame or by a certain age (between 65-75, depending on your plan).

Why convert? Many times people purchase term insurance early in life due to affordability and a high coverage need to protect their family, income, mortgage, and any other debts they may have. As they age and reduce the liabilities in their portfolio they may not need as much coverage, but still have a need for life insurance to pay for final expenses and a funeral when the time comes.

Olivia, 63, has a $150,000 term policy she purchased 19 years ago that is going to be in effect for another year. When the term policy is over, she can renew it, but the premium will increase quite a bit. Right now, she’s paying about $65 monthly; next year it will increase to approximately $150 per month.

Since her home is paid for, the kids are grown and out of the house, and she will be retiring soon, her coverage needs have changed. With the reduced liabilities, Olivia now feels she only needs a small policy that will be there to take care of her final expenses and pay for her funeral. She would like something guaranteed and easy to understand.

Life Protector is a type of whole life policy that is ideal for people who are looking specifically for affordable permanent coverage. In many cases it is a lower cost than our regular Whole Life policy. The guaranteed death benefit and low premium allows Olivia to continue her other retirement and estate planning without worrying about expenses that can occur when she dies. She could convert to a $25,000 policy for under $70 monthly.*

The decision on whether to renew your term insurance, or convert to a permanent plan depends on where you are in life and your coverage needs. For more information on conversion or the Life Protector policy, contact your Western Fraternal Life agent today, or give us a call at 877.935.2467. What is right for you?

*Based on a Life Protector policy, female, non-smoker.

Category: insurance

Shannon Daugherty

ACS, FLMI, Member Programs Assistant

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