Did you know that you can convert your term life insurance to a permanent plan with no proof of insurability?  Many times clients will not be aware of this fact and are excited to hear about this valuable option.    Depending on the carrier, there is a period of time that all or part of the policy can be converted to a permanent plan offered by that carrier.   Just about every carrier will offer a whole life and or a universal life as a conversion option.   For example, if you have a 500,000 20 year term and decide to convert 100,000 to guaranteed universal life, you will then have 100k of guaranted universal life and 400k of 20 year term.  It is important to note that this conversion can be done with no proof of insurability.  Even if you are uninsurable, you can still do the conversion.

Some companies will actually allow you to convert another companies term to their permanent plan.  Usually to be able to exercise that option the company will require that the policy was issued within a certain number of years, with at least a standard non-smoker rate.    This can be a great option if the term carrier doesn’t have good permanent policies to convert to.  For example, we had a client who had term but wanted to convert part of his plan to dividend paying whole life.   The term carrier he was with didn’t offer a whole life product.  We were able to place the conversion to whole life with a highly respected mutual life insurance company.

As your needs change, it is important to understand this option.