Buy a term plan and secure your family
Term life insurance is a useful option for providing protection to your dependents, in the case of death of the main family member. A term insurance policy will last only for a certain period, based on the duration which has been agreed upon in the contract. In case the person outlives the period of the term insurance, the policy will be considered to be void, and the coverage will have lapsed. Of course, it may not be in the best interest of the policyholder to let it lapse, and they may consider exercising the conversion option for term insurance that may exist on the policy.
Usually, the conversion option for term insurance comes free with the policy. A convertible term life insurance may be triggered at the end of the tenure. Of course, the condition is that the rules of the policy have not been violated in any manner, and the premiums have been paid regularly. Usually, if the person seeks to opt for conversion into a full time life insurance policy, and the earlier conditions have been met, they will not need to undergo any additional screenings or further medical tests. The policy will usually have a clause that allows the policy for a predetermined number of years. In some cases, there may be the option of a partial term conversion: a specific portion of the term policy shall be taken and it shall be converted into a permanent life policy. What this practically does is that two separate policies are being created. The primary motivation behind opting for a partial term conversion would be that the policyholder is unable to, or unwilling to make the premium payments for the conversion to a full policy.
The policyholder needs to think about their original motivation for going for term life insurance as compared to a full-fledged life policy. Some of the circumstances that would justify the insured making the switch are as follows:
In order to convert your term insurance into a full-fledged life insurance policy, you may follow these steps:
If your conversion expiration date is approaching and you want to be insured for a longer period of time, you have two options: convert to a permanent policy or buy a new term policy. By converting the existing term life insurance policy, you will probably need to pay greater premiums, as compared to the earlier term insurance policy premiums. Full time life insurance is more expensive because the conditions for a payout are higher. However, if the situation has changed, then the insured may reconsider their objectives for conversion.