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At Bankrate, we strive to help you make smarter financial decisions. To help readers understand how insurance affects their finances, we have licensed insurance professionals on staff who have spent a combined 47 years in the auto, home and life insurance industries. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation of how we make money. Our content is backed by LLC, a licensed entity (NPN: 19966249). For more information, please see our Insurance Disclosure. Bankrate logo The Bankrate promise
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Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in . Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way. Term life insurance only covers you for the set number of years that your policy stipulates – usually between 10 and 30. As you near the end of your policy term, you may realize that you want your coverage to continue. The good news is, you may not have to start over and purchase a brand new policy. Instead, you may be able to convert your term life insurance into whole life insurance without new evidence of insurability. This advertising widget is powered by HomeInsurance.com, a licensed insurance producer (NPN: 8781838) and a corporate affiliate of Bankrate. The offers and clickable links that appear on this advertisement are from companies that compensate Homeinsurance.com LLC in different ways. The compensation received and other factors, such as your location, may impact what ads and links appear, and how, where, and in what order they appear. While we seek to provide a wide range of offers, we do not include every product or service that may be available to you as a consumer. We strive to keep our information accurate and up-to-date, but some information may not be current. Your actual offer terms from an advertiser may be different than the offer terms on this widget. All offers may be subject to additional terms and conditions of the advertiser. Compare life insurance providers quickly and easily
See which provider is right for you. The amount of coverage you need depends on many factors, including your age, income, mortgage and other debts and anticipated funeral expenses. Whole life insurance combines life insurance with an investment component. Coverage for life Tax-deferred savings benefit if premiums are paid 3 variations of permanent insurance: whole life, universal life and variable life include investment component Term life insurance is precisely what the name implies: an insurance policy that is good for a specific term of time. Fixed premium over term No savings benefits Outliving policy or policy cancellation results in no money back Find matches Powered by HomeInsurance.com (NPN: 8781838) This advertising widget is powered by HomeInsurance.com, a licensed insurance producer (NPN: 8781838) and a corporate affiliate of Bankrate. HomeInsurance.com LLC services are only available in states where it is licensed and insurance coverage through HomeInsurance.com may not be available in all states. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way. Bankrate Why Lemonade? It's a fresh twist on life insurance: easy, accessible and affordable. See more providers in Choose from insurers in Show More If you’re considering converting your term life insurance policy to whole life insurance, we set out some steps you can take and outline who may benefit from converting their policy. Term vs whole life
With , the policyholder chooses a period of time over which their policy is active – usually between 10 and 30 years. The policyholder pays premiums until the end of the term. If they die within the policy term, their beneficiaries receive the death benefit. If not, the policyholder is left without coverage when the term ends. , on the other hand, is a permanent policy. With whole life insurance, you pay the same premium amount until you pass away. Over time, the premium payments can accrue cash value which can accumulate interest or returns. You can typically take out loans against this money or make withdrawals before you pass away. However, if you do decide to borrow against your policy, the amount you borrow may reduce the face value of the policy, and your beneficiary will receive a lower payout if you do not pay back your loan. What happens to term life insurance at the end of the term
You may be wondering, “what happens to term life insurance if you outlive the term?” If you outlive your term life insurance policy, the premiums you paid are kept by the , and your coverage ends unless you make arrangements in advance to convert or extend it if that option is available. For example, if your term ends on February 21, 2021, and you pass away on February 24, 2021, without doing anything to convert or extend your policy, your loved ones will not receive any death benefit because the policy ended. How to convert term life insurance to whole life insurance
Knowing how to convert term life insurance to may help you if you decide you still want coverage after outliving your term life insurance policy. Talk to your insurance company about what types of are available and the conversion cost. Fill out a life insurance conversion application. Choose the amount of life insurance you’d like in the conversion. Choose how you’d like to be billed for premiums (annual, quarterly or monthly). Enter bank account information if you’re setting up automatic withdrawals. Assign beneficiaries. Don’t forget to include their Social Security numbers. Sign the application. Mail, fax or upload the application. Reasons to consider converting from term to whole life
Whole life insurance provides a few additional benefits beyond the death benefit that term life insurance provides. If you’re considering converting your term policy to a whole life policy, you may want to consider the following characteristics.: With permanent life insurance: Part of your premium will go towards building a cash value account: When you convert a term life product, you’ll add a second feature — a cash value account. You can typically borrow money from a whole life insurance policy after enough cash value has accrued. Your policy won’t expire: A whole life insurance policy is permanent, meaning you’ll pay the same premiums and maintain coverage for the rest of your life unless you stop paying your premiums. You’ll lock in premiums for life: Since a whole life insurance policy doesn’t expire, whatever the premiums you agree to will be the same for life. You’ll know what you’re paying for the rest of your life. What is a conversion clause
A conversion clause is a section of most life insurance contracts that allow policyholders to convert their term life insurance policy to a permanent form of life insurance. Conversion clauses are valuable because they allow a policyholder to maintain coverage without presenting new evidence of their insurability. “The way I would describe it is when someone purchases term, in essence they are leasing insurance with an option to buy,” Patrick Bowen, vice president and senior account manager for Legal & General America life insurance says. “The convertibility clause is your chance to convert without new evidence of insurability. But if you aren’t paying attention and forget to convert within your allotted time, you are out of luck.” The conversion clause allows heads of household, for a price, to transform their temporary insurance into permanent life insurance without having to requalify or undergo physical examinations. Not all policies have a conversion clause, and policies that do have conversion clauses generally cost more. However, the conversion clause can be worth the extra expense, Vogel says. Sometimes paying a conversion cost is better than going without coverage when your term policy ends. How it works
Let’s say a woman has a 20-year term policy with a 10-year conversion clause. Nine years into her contract, she develops heart disease, diabetes or some other health problem. Because she is still within the 10-year conversion period, she can convert her term life insurance policy to a permanent one. By converting to a permanent policy in time, she would not need a new physical exam and would be eligible for coverage through a permanent policy that might otherwise be difficult to obtain without the option to convert her existing policy. If the policy had been written without a conversion clause, she would face an expiring policy and potentially high renewal premiums. Review your policy on an annual basis
To make sure the conversion window doesn’t sneak up, you may want to review your policy with an agent on an annual basis. The development of a health problem is not the only reason to convert a policy. As a rule, the older you are, the more expensive you are to insure. If you can begin paying toward a permanent policy while in your 20s, the monthly premium will be much lower than someone in their 50s would pay. And your financial needs may change as you get older. You may need a policy with a sizable death benefit to replace your income and provide for three small children, but having such a large policy may no longer be as important after you pay down the mortgage and the children grow up. Frequently asked questions
What is the best life insurance company
The is different for everyone as it depends on individual preferences and needs. One of the easiest ways to find the best life insurance company for you is to speak with an independent insurance agent and discuss your policy needs. Once you’ve decided on a policy, you may want to generate a few life insurance quotes online from multiple providers. That way, you can make sure you’re getting the right policy at the right price. Is term life insurance better than whole life insurance
is a better option for some people, and whole life insurance is a better life insurance for others. Term life insurance can be a great option for those who want affordable premiums for only a specific period of time. For instance, if you only want coverage while your children are young and financially dependent on you, term life insurance could be a great option. Should you get life insurance for your child
Whether or not you get life insurance for your child is a personal decision. Getting life insurance for your child early on can help their insurability later in life. If your child were to develop a health issue down the line, they may have more affordable rates by locking in a cheaper premium earlier in life. SHARE: Cynthia Paez Bowman is a former personal finance contributor at Bankrate. She is a finance and business journalist who has been featured in Business Jet Traveler, MSN, CheatSheet.com, Freshome.com and TheSimpleDollar.com. Maggie Kempken is an insurance editor for Bankrate. She helps manage the creation of insurance content that meets the highest quality standards for accuracy and clarity to help Bankrate readers navigate complex information about home, auto and life insurance. She also focuses on ensuring that Bankrate’s insurance content represents and adheres to the Bankrate brand. Related Articles