Convertible Term Life Or Whole Life
Convertible Term Life insurance allows the insured to change the face value from term coverage to whole life coverage. Most policies have this availability, allowing the insured to extend their coverage needs with the changing of their life’s circumstances. Convertible term life insurance is typically purchased by young, healthy individuals who select the type of coverage because of the low premium costs. This type of basic coverage will afford their family needs. At some point in their life, many of these policyholders decide to “convert” their policy to a whole life insurance policy for a stable policy that will cover their more mature family needs.
When an individual decides to purchase life insurance, they typically decide on the type of policy by where they are in their life. This means, for example, if an individual who is not married purchases a life insurance policy, their need for the insurance differs from those individuals who are married with a mortgage. Further, there may be married couples who have children as well as a mortgage, their needs will also differ. By initially purchasing a convertible term life insurance policy, these mentioned individuals will have the option to convert their policies as determined by their life’s circumstances.
Advantages Of Convertible Term Life
One of the advantages of purchasing convertible term life insurance is that the insurer is bound by the terms and conditions of the policy to renew the coverage even if the insured undergoes any changes in status of health. This means that as long as the premium payments are being paid and the insured in complying with the conditions of the policy, the coverage is to remain in effect.
Another advantage to this type of insurance is along with continuing the policy coverage, the convertible term life insurance policy also has the potential to upgrade the policy from term to whole life.