Term life insurance only covers you for the 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.

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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 insurance

With term life insurance, the policyholder chooses a period of time over which their policy is active — usually somewhere 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.

Whole life insurance, 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 policy can accrue cash value. 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 at the end of a life insurance term?

You may wonder 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 life insurance company, 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, 2023, and you pass away on February 24, 2023, 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 to whole life insurance may help you if you decide you still want coverage after outliving your term life insurance policy. Here are the steps you could take to convert your policy, but specific steps may vary based on your company and policy.

  1. Talk to your insurance company about what types of permanent life insurance are available and the conversion cost.
  2. Fill out a life insurance conversion application.
  3. Choose the amount of life insurance you’d like in the conversion.
  4. Choose how you’d like to be billed for premiums (annual, quarterly or monthly).
  5. Enter bank account information if you’re setting up automatic withdrawals.
  6. Assign beneficiaries. You may need to include their Social Security numbers.
  7. Sign the application.
  8. Mail, fax or upload the application.

Can all term policies be converted to whole policies?

Most term life insurance policies can be converted to whole life at the end of the policy term. However, each life insurance policy and company is different, so your ability to convert term to whole life will depend on your unique situation. Some policies will have a conversion option built in, and some will require you to buy a conversion rider. It’s possible that your policy won’t have a conversation option at all. The best way to know if you’ll be able to convert life insurance from term to whole is to talk to your agent.

What is a conversion clause?

A conversion clause is a section of a life insurance contract that allows policyholders to convert their term life insurance policy to a permanent form of life insurance. Conversion clauses may be valuable because they allow a policyholder to maintain coverage without presenting new evidence of their insurability. Sometimes, conversion clauses are simply built into term life insurance policies, but in some cases, you may need to add a conversion rider to your policy to give you the option to convert term insurance to whole life insurance.

A conversion clause allows a policyholder, typically for a fee, to transform their temporary insurance into permanent life insurance without having to requalify or undergo physical examinations. However, your age will likely still factor into your quoted premium for the permanent policy; older individuals will generally pay more for life insurance than younger individuals.

Pros and cons of converting term to whole life insurance

If you’re considering converting your term policy to a whole life policy, you may be wondering about potential downsides. Below are some pros and cons of converting life insurance that you may want to understand before making the decision:

Pros Cons
Gives you the ability to obtain permanent coverage.
Medical exams aren’t generally required when you convert term to whole life insurance.
May help you obtain permanent coverage if you’ve developed a new health issue that could prevent you from qualifying in a standard underwriting process.
May have to add a conversion rider, which could increase your term premium.
Age at the time of conversion still factors into your premium for the permanent insurance.
May be limited in the types of policies you can convert to. You may have more options if you simply purchase a new policy.

Frequently asked questions

    • The best life insurance company 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 may be 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 from different providers. That way, you can make sure you’re getting the right policy at the right price.
    • Term life insurance is a better option for some people, and whole life insurance is a better life insurance for others. Term life insurance may 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 choice.
    • The timing of your conversion depends on your insurer and your policy. If your policy can be converted, you should receive a notification of your eligibility and what is needed to complete the process. To convert life insurance from term to whole, you must act within this period. You likely won’t be able to decide you want to convert on the last day of your term. Most policies have a period between 90 and 30 days prior to the end of the term that allows for the conversion option to be exercised, but it could be up to a year or more in advance of your term ending. If you know you want to convert term to whole life insurance, you could talk to your agent well in advance to discuss timing.