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Term life insurance is a policy that for a specific amount of time can be converted into permanent life insurance without typically going through the insurer’s underwriting process again. Depending on your situation and coverage needs, this type of plan may be well worth the investment. Let’s take a closer look at term life insurance that can be converted and some key features it offers.
Convertible term life insurance is a type of policy that lets you convert to permanent life insurance once your coverage expires. When you first apply for term life insurance, you’ll have a policy that can last for 10, 20, or 30 years, as long as you continue paying your premiums. If you find that you still need life insurance toward the end of your policy’s term, you can convert your term life insurance to a permanent plan, such as whole life insurance, with no new medical exam or underwriting process. With convertible term life insurance, you can enjoy coverage for the rest of your life, and don’t have to worry about your policy expiring.1
Don’t wait until it’s too late. Help cover yourself and your family with coverage from Aflac.
The most noteworthy features of a term life insurance policy that can be converted are:
With convertible term life insurance, you can eventually switch to a policy that is not for a term limit and can last your entire life. But even if you die during the initial term, your beneficiaries will receive the death benefit once they file a claim.
The conversion period refers to when you can convert your policy to permanent life insurance. While this varies by insurer, it’s usually before the term ends or before you turn 70, whichever comes sooner.1
If you have convertible term life insurance, you can typically choose to convert to any type of permanent policy your life insurance company offers, such as whole life or universal life insurance.1
When it comes to convertible term life insurance, some life insurance companies allow partial conversions. If you opt for a partial conversion, part of your term life policy will be converted to a permanent life policy, such as whole life insurance, and the rest will remain term life insurance. For example, if you have an $800,000 policy and convert $300,000 to whole life insurance, the other $500,000 will remain term life coverage. You can also choose to convert all $800,000 to a whole life policy, which is a full conversion.
Here are several key advantages of converting term life insurance:
Many convertible term life policies let you choose when you want to convert from term life to permanent life insurance. You can do this any time before the conversion period comes to an end.1
When you convert a term life policy to a permanent life policy, insurers won’t require a new medical exam. Being able to switch coverage at a future date without having to undergo a new health screening process can be a huge plus.2
The premiums you’ll pay will be determined at the start of your convertible term life policy. While your convertible term life insurance is active, your premiums will remain the same. But keep in mind that once you convert your policy to whole life insurance or other type of permanent policy, premiums may increase.1
Convertible term life insurance offers the chance to extend your coverage for the rest of your life. This may better suit your needs if your circumstances change over time.
You might want to explore convertible term life insurance in these situations:
Do you have aging parents you’re providing for or a child with a disability? If so, you may need coverage beyond your policy’s initial term.1
If you have debts, like a mortgage payments and car loan, and don’t believe you’ll pay them off before your initial term expires, it might make sense to convert to permanent life insurance.1 By doing so, you can help protect your loved ones from a hefty debt burden.
As you age and your health declines, life insurance can become more expensive and difficult to get. If you choose a convertible term life policy, you may not have to worry about taking a new medical exam to qualify for coverage.2
Several alternative options to a convertible term life policy include:
With level term life insurance, you may enjoy level premiums for your policy’s entire term. Your beneficiaries will be owed the same payout regardless of whether you pass away during year one or the last year your policy is active.
Renewable term life insurance helps you to decide if you still need coverage at the end of your term. If so, you may continue to renew your coverage up to a certain age, such as 70, 80 or 95 years.3
A decreasing term life plan is a type of term life insurance with a death benefit that gets smaller over time. This type of policy is usually tied to a specific loan or debt that you’re gradually paying off.
If you’d like the flexibility of being able to change your term life insurance to a permanent life policy when your policy expires, converting a term life policy should be on your radar. This can help you to switch to lifelong coverage, such as whole life insurance, as your long-term needs change.
Aflac is pleased to offer term life insurance with premiums that stay the same throughout the duration of the policy. With our term life policy, you can get something that fits your budget with enhanced coverage tailored to your needs. We also offer whole life insurance plans with reasonable premiums and coverage that lasts a lifetime. Contact an Aflac agent today for more information and get a quote.
1 Policygenius - What is Convertible Term Life Insurance? Updated October 19, 2023. https://www.policygenius.com/life-insurance/convertible-term-life-insurance/. Accessed July 25, 2024.
2 Investopedia - What Is a Convertible Term Life Insurance Policy? Updated September 19, 2023. https://www.investopedia.com/ask/answers/09/convertible-insurance-policy.asp. Accessed July 25, 2024.
3 CNN – Annual renewable term life insurance: What is it? Updated January 24, 2024. https://www.cnn.com/cnn-underscored/money/annual-renewable-term-life-insurance#:~:text=Coverage%20isn't%20permanent%3A%20Most,cause%20a%20lapse%20in%20coverage.. Accessed July 25, 2024.
Content within this article is provided for general informational purposes and is not provided as tax, legal, health, or financial advice for any person or for any specific situation. Employers, employees, and other individuals should contact their own advisers about their situations. For complete details, including availability and costs of Aflac insurance, please contact your local Aflac agent.
Aflac coverage is underwritten by American Family Life Assurance Company of Columbus. In New York, Aflac coverage is underwritten by American Family Life Assurance Company of New York.
Aflac life plans - 68000 series: In Arkansas, Idaho, Oklahoma & Virginia, Policies: ICC1368100, ICC1368200, ICC1368300, ICC1368400. In Delaware, Policies A68100-A68400. 65000 series: In Virginia, Policies ICC0965JTO & ICC0965JWO. B61000 series: In Arkansas, Idaho, Oklahoma & Virginia, Policies: ICC18B61JWO & ICC18B61JTO. In Delaware, Policies B61JWO, B61JTO. B60000 series: In Arkansas, Idaho, Oklahoma & Virginia, Policies: ICC18B60C10, ICC18B60100, ICC18B60200, ICC18B60300, & ICC18B60400. Q60000 series/Whole: In Arkansas & Delaware, Policy Q60100M. In Idaho, Policy Q60100MID. In Oklahoma, Policy Q60100MOK. Not available in Virginia. Q60000 series/Term: In Delaware, Policies Q60200CM. In Arkansas, Idaho, Oklahoma, Policies ICC18Q60200C, ICC18Q60300C, ICC18Q60400C. Not available in Virginia.
Aflac Final Expense insurance coverage is underwritten by Tier One Insurance Company, a subsidiary of Aflac Incorporated and is administered by Aetna Life Insurance Company. Tier One Insurance Company is part of the Aflac family of insurers. In California, Tier One Insurance Company does business as Tier One Life Insurance Company (Tier One NAIC 92908).
In AR, DE, ID, OK and VA: Policies ICC21-AFLLBL21 and ICC21-AFLRPL21; and Riders ICC21-AFLABR22, ICC21-AFLADB22, and ICC21-AFLCDR22.
Coverage may not be available in all states, including but not limited to DE, ID, NJ, NM, NY or VA. Benefits/premium rates may vary based on state and plan levels. Optional riders may be available at an additional cost. Policies and riders may also contain a waiting period. Refer to the exact policy and rider forms for benefit details, definitions, limitations, and exclusions.
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Aflac New York | 22 Corporate Woods Boulevard, Suite 2 | Albany, NY 12211
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