When Is the Best Time to Switch to Whole Life Insurance?

When Is the Best Time to Switch to Whole Life Insurance?

Term life insurance offers a more affordable option than permanent life insurance for anyone looking to protect their loved ones against unexpected financial expenses upon their death. Read our guide on what is term life insurance to understand how it works, who it’s for, and how to get it.

Term life insurance is a type of life insurance coverage that expires after a certain length of time or a “term.” It is also known as “term assurance” or “pure life insurance.” Until its expiration date, the policy guarantees payment to a beneficiary (or beneficiaries) if the insured dies.

The pros and cons of converting term life insurance

With term life insurance, you and your family are protected for the length of the policy — which usually ranges between 5 and 30 years. But after the term is up, so is your coverage.

That expiration may be fine with you if it happens after your financial obligations to your family are complete. But converting the policy to permanent allows you to pass along a death benefit to your survivors regardless of when you die. And to do so without the complications of getting a brand-new policy — like fresh medical issues.

Decide how much benefit to convert

You can convert up to the amount of the term policy’s death benefit, but that doesn’t mean you should necessarily move the full amount to a new policy. The more you convert, after all, the higher your premiums for the converted policy.

Many convertible policies permit partial conversions, which could make the conversion more affordable. If, for instance, you had a $500,000 term policy, you could do a partial conversion into a permanent policy with a $100,000 death benefit.

Increasing the death benefit probably won’t be an option for the converted policy. You generally can’t convert a term policy into a permanent policy with a higher value, even if you’re willing to pay the premiums to do so.

Is Term Life Insurance Right for You?

If you’re getting married, starting a family, or buying a house, you should be considering some type of life insurance. And your policy should be in effect as long as your family will depend on your income. Term life insurance is an excellent option for those with dependents but not a lot of disposable income to invest in a permanent life insurance policy.

Fresno Financial Planner Takeaways 

When it comes to Fresno retirement planning Soutas Financial puts your future first. Don’t forget these great reminders: Term life insurance is a type of life insurance coverage that expires after a certain length of time or a “term.” It is also known as “term assurance” or “pure life insurance.” With term life insurance, you and your family are protected for the length of the policy — which usually ranges between 5 and 30 years. Increasing the death benefit probably won’t be an option for the converted policy. You generally can’t convert a term policy into a permanent policy with a higher value, even if you’re willing to pay the premiums to do so.

Diversifying your retirement assets among a variety of vehicles and alternatives—both insurance and investment oriented, depending on what is appropriate for your situation—may offer you a better chance of meeting your retirement income goals throughout your lifespan. We help our clients with problems sometimes associated with retirement such as stopping spend down and avoiding probate. In doing so we leverage Medicare long term care as well as risk management designed to help accomplish those goals.

When searching for Fresno financial advisors, look no further than Soutas Financial & Insurance Solutions Inc. your Fresno retirement planning advisor is committed to helping take the complexity out of retirement planning. By using a variety of insurance and investment strategies that focus on Asset Protection, Long-Term Care Strategies, Legacy Planning Tax-Efficient Strategies, IRA, 401(k) & 403(b) Rollovers, Life Insurance, Annuities, Medicare, we can help you develop an overall retirement income strategy specific to you and your family. We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial to get your retirement plans on track for success!

Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Soutas Financial & Insurance Solutions, Inc. are not affiliated companies. California Insurance License # OK48173

Other Fresno Financial Advisor Articles 

Soutas Financial & Insurance Solutions Inc. 
333 W. Shaw Avenue Suite 106
Fresno, CA 93704 
(559) 230-1648 
Soutas.com 

via Converting Your Term Life Insurance: Here’s When Switching to Whole Life Makes Sense

via What Is Term Life Insurance and How Does It Work?

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

-967082 – 07/21