What Is A Convertible Term Life Insurance Policy?
Convertible term life has become extremely popular over recent years. This type of life insurance allows people to get coverage for a shorter period of time-converting it from a permanent to a flexible life policy. People often get this type of life policy because they are about to undergo some major medical treatment such as a hip surgery or knee surgery. Other times, people decide to convert their life policy from a permanent to a term policy so that they can have more flexible coverage while they’re in the process of recovering from an injury or illness. Still others choose to convert their term policies once they reach a certain age.
The most important benefit of convertible term life insurance lies in its flexibility. Instead of being tied down by some rigid lifetime limits that can’t be altered, people in this type of policy have the freedom to make some changes to their coverage. In addition, they no longer need to worry about any potential negative impact on their credit rating from failing to pay premiums on time. Instead, their instability depends on a set of factors which vary according to each person. Factors such as their age and whether they have any existing insurable interest in a policy are taken into consideration before the underwriting process begins.
Your health rating is one of the most important factors in determining whether you qualify for a low cost premium on a convertible term life insurance policy. Health exam scores will also affect your premium. Therefore, you should always take a thorough medical exam both before and after you apply for coverage. Make sure that you get a physical exam with your current doctor. Also, find out if you have to pass a screening exam in order to get a quote from an underwriter.
Because you cannot change your health rating once it has been finalized, you will probably have to settle for a lower premium on a convertible term life policy. However, keep in mind that the premiums paid on these policies do not start until the age of sixty-five. If you begin taking better care of your body while you are young, you can save yourself hundreds of dollars on the cost of coverage. In addition, if you purchase enough coverage over a long period of time, you can save significant money on annual deductibles. In this way, a convertible term life policy may be a good option for many people.
Another area where the convertible term life insurance policies may fit you well is if you have an unusual amount of risk. For example, if you have a history of serious depression, a history of drug abuse, or if you are a heart patient, your premiums will probably be higher than they would be for someone who is fit and healthy. Keep in mind that there is a waiting period for most permanent life insurance policies. With a convertible term life insurance policy, however, the waiting period begins immediately, and you do not have to wait to purchase coverage. This means that you can begin taking better care of your body right away, which could pay off for you down the road.
The next thing that you need to keep in mind when you are trying to decide whether a convertible term life insurance policy might make sense for you is your overall financial situation. You should think about how much money you currently have available, as well as what you might have in the event of a disastrous accident. For example, if you have a large mortgage payment, the payments may still be substantial each month. If you do not have a large mortgage payment, however, your house might not be the first thing that would go.
If you are concerned that you do not have enough death benefit, you might want to review your term life insurance policy. Typically, a term policy will provide coverage for one year or until your death benefit is depleted. If you have more than enough money to sustain yourself for at least a year, then you should purchase additional coverage. However, if you are living on a fixed income, you may need more than just the death benefit to provide long term financial security.
When it comes to choosing the right kind of policy, it may be helpful for you to consult with an expert in the field. Fortunately, there are many websites that will help you find information that will guide you through the process. If you want more information, you can also contact a local agent. If you already know which type of policy you want, but you do not know how much coverage you need, an experienced advisor can help you make the best decision.