Term conversion is the process of changing your existing term 10 policy into a term 20 policy before it renews.
What’s so special about the number 7
Term 10 policies have the option to be converted to another term policy before the 7th policy anniversary. No medicals or new underwriting is required, your rating on the new policy stays the same as the 1st day you took it out.
Why should you convert
- Locking in Insurability: Reapplying for a new policy leaves you exposed to having a higher rating which could increase the premiums you have to pay.
- Converting your existing policy takes away this risk since it takes the rating from when you started the policy, locking in lower ratings associated with your younger age. Your rating will be based on health at the time of the original application.
- Premiums at conversion are based on age nearest to the new policy date.
- Extended Coverage: If you anticipate needing life insurance coverage for a longer period than the original 10 years, converting to a term 20 policy will provide coverage for an additional two decades.
- Long-Term Planning: This allows people to have 27 years of coverage planned on day 1 all on only one insurance application.
- Financial Savings: If you simply renew your current policy after 10 years and do not cancel it and purchase a new one, the premium costs will substantially increase year over year.