When purchasing term life insurance, make sure you understand all of your options, such as convertibility rights. Converting your term life policy to a permanent life policy may be a good option if you want to extend your coverage when the end of your term in nearing.

First, let me remind what you the difference is between term life and permanent life insurance. Term life insurance is temporary insurance. The only way for a beneficiary to collect a death benefit is to die before the term of the coverage expires. On the other hand, permanent life insurance provides coverage throughout the insured’s lifetime. In addition, it provides a savings element that allows you to build cash value.

Before you make the decision to convert your policy, there are some things you should consider, such as:

What type of permanent life insurance policy – You have two options when choosing which type of permanent life insurance policy to convert to, whole life or universal life. Universal life is a flexible policy and generally costs less. As the insured, you are usually able to change the face amount and premium of a universal life policy as life circumstances change.

A whole life policy, however, usually has a high fixed premium because this type of coverage allows you to develop a cash value. Whole life insurance is best suited for those who have financial needs that won’t diminish over time, such as estate settlement costs and taxes.

Cost of a permanent life insurance policy – Permanent life insurance is generally more costly than term life insurance. Make sure you evaluate your life insurance needs and financial situation before converting to this type of coverage. If you can afford it, taking advantage of your convertibility rights may be the best option for you to protect your family and your assets.

When can you convert – Life insurance companies have different conversion guidelines, so make sure you consult your agent to learn your options. For example, some companies will allow you to convert your term life policy at any time during your coverage period, while others may only allow you to convert to age 50.

For more information on converting your term life insurance policy or to purchase an affordable term life insurance policy, contact an experienced life insurance agent. The agents at AccuQuote.com can answer your questions about your convertibility rights and offer you free term life insurance quotes.