Convertible Term Insurance

Insurance policies can be renewed depending on the provisions given from your insurance company. The insured will have a choice to expand the face value of his life insurance policy. This is under the concept of Convertible term insurance.

Convertible term insurance allows the insured to change the face value of his insurance policy in force to permanent form of life insurance such as Universal Life insurance assuming that applicable conditions are met without any penalties or evidence of insurability. The insured has the choice to expand his coverage to which life circumstances and financial needs are to be considered. Convertible insurance can be related to different types of coverage but his commonly pertains to life insurance.

Convertible term insurance is mostly purchased at a younger age with much low premium rate. This convertible term insurance can be made of use when the person insured is still at a young age where the insurance could still cater for small expense and premature death but as time comes everyone gets older, this convertible term insurance might not be enough to cater the long term needs of the insured so it is of best interest that the policy holder should convert their policy to a more permanent type of insurance such as Universal Life. In this case, premium would be of high rate.

The option to expand your policy is not only limited to permanent life insurance. You can choose from different types provided on your insurance policy. Hence, you have to be reminded that there are advantages and disadvantages underlying this. For examples, if you’ll convert your insurance to a permanent life insurance, you have to be ready for a higher premium and less death benefits and cash value. All the details written in the contract has corresponding advantages and disadvantages that clients might take into concern of reading. There are different types of convertible life insurance to choose from that will surely suit your needs and wants.

The insured party should meet the guidelines set in the policy in order for him to convert the term coverage to permanent or whole life coverage at the certain points of life. This will allow the people to upgrade from an inexpensive policy that cater less to lifetime coverage without even having additional screen process to attend for.

A Convertible Term insurance is usually purchased in the earlier years of life that could provide a good foundation to start with that would build up cash value and earn interest. This is a good investment instrument to have a better chance to purchase a Permanent Life insurance plan that will provide more benefits. For most people, Convertible Term insurance is not a bad option as it is flexible enough to ensure our loved ones.

Generally speaking, convertible term insurance is a guaranteed renewable insurance coverage that entails that as long as the payments are made on time, the option to convert the policy would remain possible and the termination of the policy would be impossible. However converting the policy is not mandatory it will depend on the insured if he wants to retain the same coverage as long as the insured is alive.