Most term life insurance policies include a conversion option — a powerful feature that allows you to convert your term policy into a permanent policy without providing any new evidence of insurability. No medical exam, no health questions. You keep the risk class you were originally assigned, regardless of what’s happened to your health since.
How a Term Conversion Works
🔒 Your Original Risk Class is Locked In
The premium on the new permanent policy is based on your original risk class — not your current health. If you were issued at Preferred when you bought the term policy and have since had a heart attack, you still convert at Preferred rates. This is the single most valuable feature of a term conversion.
📅 Premium Is Based on Your Current Age
While your health class is locked in, the premium on the converted permanent policy is calculated at your current age — not the age when the term policy was issued. The longer you wait, the higher the premium will be. Converting earlier in the term period is almost always more cost-effective.
⏰ Conversion Windows Vary by Carrier
Some carriers allow conversion for the full term period — a 20-year term gives you a 20-year conversion window. Others limit it to the first 5 or 10 years. A few restrict conversion to specific permanent products. Knowing your policy’s conversion provisions before you buy is critical.
🔄 What You Convert To
Term policies typically convert into universal life (UL) or whole life insurance — both of which can guarantee the death benefit for life. If the full-life guarantee is too expensive, you can often “dial down” the guarantee period (e.g., to age 85 instead of 121) to reduce the premium to a more affordable level.
Why Convert Instead of Just Buying New Coverage?
Health Has Changed
If you’ve developed a condition that would now result in a rated policy or a decline, conversion lets you lock in permanent coverage at your original health class — something you couldn’t otherwise get.
Permanent Need Has Developed
Business succession planning, estate tax coverage, or a special needs dependent may create a need for lifelong coverage that your original term policy wasn’t designed to provide.
Avoid the Conversion Window Expiring
If your conversion window is closing and you anticipate needing permanent coverage, converting now — even to a small amount — locks in insurability before the option disappears.
Want to Discuss Converting Your Term Policy?
Call us at 1-888-972-0024. We can review your current policy’s conversion provisions, compare available permanent products, and help you decide if converting makes sense for your situation.