So what is life insurance conversion? Typically, a simple term life insurance policy works for most people.This is something you will read time and time again in the Huntley Wealth blog.It’s my sincere belief that if you take the difference between what you would pay for a term policy vs a whole life policy and invest it you will have stronger returns.

Risk Related ConversionsTerm ExpirationConversion FactorsConversion CreditsHybrid/Universal ConversionsCostReplacementTwo SamplesCompare Quotes Now! That being said, there are times when life circumstances change.Luckily many term policies provide a life insurance conversion option that enables you to upgrade your policy from term to permanent, under the original health rating should the need arise.For example, let’s say you’re 65 years old and purchased a term life insurance policy 10 years ago.

At the time of policy issue, you were in excellent health and rated at “Preferred Non Tobacco.” But in the past 10 years, you’ve developed sleep apnea and were diagnosed with diabetes.  It would be difficult to secure a Preferred offer today.Here’s where the life insurance conversion benefit kicks in.  You can convert to a permanent policy at the “Preferred Non Tobacco” rating, WITHOUT evidence of insurability.  So you’ll pay what any other 65 year old in excellent health would for the same policy.Sounds pretty good to me! RELATED: 5 Critical Tips You Must Know Before Buying Life Insurance To fully understand life insurance conversion options, you must know what two options are available to you when the level term period expires on your policy.

Option 1: Pay an annual renewable rate, which means your premium is no longer fixed but rather increases year after year.  Going into your purchase of a 10 – 30-year term policy, no one knows what the cost will ultimately be when you renew.You have a contractual guaranteed annual renewable premium figure in the initial contract, but the rate shown there is a worst-case scenario.It’s very likely the renewal premium won’t be that high.

Option 2: Convert the policy to a permanent policy, whether it be whole life or universal life.These premiums are also unknown since you can’t be sure what permanent products will be available when you convert 10, 15, or 30 years down the line.So let’s say you’ve found a policy that offers a life insurance conversion option.

Now you need to nail down the details of what options are really offered.Each policy carries its own conversion limitations.Pre-existing health conditions? AIG Direct specializes in insuring people just like you.

From high blood pressure to diabetes, AIG Direct has seen it all and since they have access to multiple companies, they can find you the absolute lowest rates! Click below to see if you qualify.FREE AIG DIRECT QUOTE Quotes are quick, easy, and free! Maximum Age Policies provide age limits in regard to when you can exercise your life insurance conversion option.For example, a Banner OP Term 15 policy can be converted to a permanent product until the insured reaches 70.

Minnesota Life’s Advantage Elite Term 15 carries a maximum conversion age of 75.If you purchase a term life policy, and there’s a possibility you may one day need permanent coverage, be sure to look at the maximum age.The older the better.

RELATED: Check Sample Life Insurance Rates by Age (No Personal Info Required) Availability and Choice of Permanent Policies Buyer beware: Some policies allow conversion to ANY permanent policySome policies allow conversion to a permanent policy of the carrier’s choosingFor example, Ohio National has two types of term – regular or plus: 15 Year Term – converts to policy of carrier’s choice15 Year Term PLUS – converts to ANY permanent policyThis option is probably the most important conversion feature.  If your term policy allows you to convert to ANY permanent policy, this is a fantastic benefit! In most cases, you will have a choice between converting to a low premium, guaranteed universal life plan, or a higher premium, cash accumulation plan.If you aren’t given a choice, you can guess which policy the company will likely allow you to convert to… …the highest priced option of course! If you’re shopping for insurance, be sure to ask your agent what the conversion privileges are.Ideally, you want a product that is convertible to “any permanent policy without evidence of insurability.” Other options that may be offered are conversion to “select permanent policies” or conversion to a “permanent policy selected by XYZ insurance company.” Some term policies carry life insurance conversion credit, which reduces the premium payments on the new Permanent Policy by some degree.

For example, Prudential‘s Essential Term policies don’t offer credits.That being said, Prudential Elite Term policies do offer credits, which reduce the first year of premiums for the new policy by the amount of the old term premium.All Term policies we sell have some sort of conversion feature.

Again, I will reiterate that all term policies WE SELL have this feature.That doesn’t mean all term policies out there offer conversion privileges.Primerica is one such company.  Since they don’t offer permanent products, a conversion option wouldn’t be necessary.

Skip the Needles! Want to take the “pain” out of life insurance? We don’t blame you! Bestow is one of our top recommended no-exam companies offering 10 and 20 year plans up to age 55.See if you qualify for “no exam” today.FREE NO EXAM QUOTE Quotes are quick, easy, and free! In a sense, these policies automatically “convert” to a permanent product.

 However, you need to be careful when you classify hybrid term-UL products as term policies.These are not actually true term policies.They are built on a universal life policy foundation and add a no-lapse feature for a number of years, which makes the policy act like a term policy for the duration of the no-lapse guarantee.

At the end of the initial no lapse period, these policies don’t technically “convert,” per se.  Instead, they simply revert to the UL function once the no-lapse feature expires.At this point, your premiums increase and the policy functions like any other universal life policy.At the time of writing this article, the two main players in the term/UL hybrid arena are Genworth and Transamerica, with their TransTerm UL.

*Since this article has been updated Genworth has stopped selling life insurance.If you have a Genworth product, check out our article for some information about what you could do: What Should I Do With My Genworth Policy?  This really depends on what type of permanent policy your insurance company allows you convert to, as explained above.  If they let you convert to their lowest cost, guaranteed universal life insurance policy, the premium may only increase 2 – 3 times the premium you are currently paying.Depending on your age this may be more.

If you’re already having trouble affording your premiums, life insurance conversion is not the answer.It always costs more to convert than to stay with your current policy.There are many instances when replacing your existing term policy makes more sense than converting it to a permanent policy.  Be sure to get quotes from a different carrier and then compare those quotes to your conversion illustration.

If you need a term life insurance policy with strong conversion privileges or have any questions about life insurance conversion, please call us at 888-603-2876 we can help! CHECK EXACT LIFE INSURANCE RATES I recently had a client ask me about which term product has better conversion options: Met Life or Voya? *Voya’s Term Products: TermSmartTermSmart NYROP Endowment TermROP Endowment Term NYMetLife’s Term Products: Simplified Issue Term LifeLevel Term Life InsuranceOne Year Term Life InsuranceMetLife and Voya’s term policies are convertible, offering conversion at no additional charge.*Update 12/18/18 – Voya is no longer selling life insurance in the U.S.but the comparison below still shows how companies’ conversion options differ.

What Type of Permanent Policy Can You Convert To? Most of Metlife’s products allow you to convert to “any currently available” permanent policy.Voya allows you to convert “to select cash value policies”.It is impossible to say with certainty which company will have the lower priced conversion options 10 – 20 years down the road because no one knows for sure which permanent products will be available at that time.

That being said, I can attest that based on today’s current pricing, Voya’s premiums are lower for all three of the most likely conversion periods (10, 15, or 20 years from today with a $10 Million face value).The bottom line is, Voya may provide you with preferential premiums if they continue with their current pricing but it really isn’t possible to pick a clear favorite when it comes to life insurance conversion options.Find Out If You Qualify for Special Rate Life Insurance Health IQ offers exclusive active lifestyle discounts.

You may qualify if you are an active runner, cyclist, yogi, vegetarian, swimmer, or other.Find out how much you can save! FREE HEALTH IQ QUOTE Quotes are quick, easy, and free! My name is Chris Huntley and I am the founder and president of Huntley Wealth & Insurance Services.I’ve been an independent life insurance agent living in San Diego since 2004.

I specialize in serving high-risk clients and like to think I’ve built Huntley Wealth from the ground upon a foundation of superior care.My passion is helping individuals, like yourself, to find the most affordable coverage possible while meeting their personal needs.Are you thinking about purchasing life insurance or are you thinking about converting your term policy to permanent? If so, Huntley Wealth can help you review your options.

We have access to over 40 life insurers and will work tirelessly to get you the best rating and the lowest possible premiums.Our agents work for YOU, NOT the life insurance companies.Call Huntley Wealth right now at 888-603-2876 if you need affordable term insurance, we can help!  *While we make every effort to keep our site updated, please be aware that "timely" information on this page, such as quote estimates, or pertinent details about companies, may only be accurate as of its last edit day.

Huntley Wealth & Insurance Services and its representatives do not give legal or tax advice.Please consult your own legal or tax adviser.