Converting Your Term Life Insurance Policy

If you already have a term life insurance policy and you’re interested in converting your policy, you’ve come to the right place! We often assist people looking to convert their existing policies. Please contact one of our life insurance specialists today so we may help you through the conversion process.

With the exception of a few, almost all term life insurance policies offer a conversion option. A conversion option allows the insured to convert their existing term policy to a permanent whole life or universal life policy. If you’re considering converting your current policy, be sure to check your life insurance policy to confirm that conversion is still an option. Some insurance companies offer a conversion option, but only for a certain period. If you’re unsure if your policy has a current conversion option, please contact us so that we may help you.

There are several reasons why you might consider converting your term life insurance policy to a permanent whole life policy. These reasons may include gaining access to cash value, extending a term policy that is nearing expiration, or converting only a small portion to cover burial expenses and/or estate taxes.

Converting a policy, rather than replacing it, capitalizes on the fact that your health or occupation status may have been in a better state than when you first obtained your term life policy. When converting an existing policy, the insurance company doesn’t require proof of insurability. This means that no new health exams are required. The insurance company won’t review your current health or occupation status and you will receive the same health status as you did when you first applied for your term policy. This is particularly important with individuals who have Multiple Sclerosis that is progressing and/or worsening.

Cash Value

Another benefit of converting a term life insurance policy to a permanent whole life or universal life policy is cash value. Whole life and universal life insurance policies can build cash values over time, which can be withdrawn or borrowed during your lifetime. The money withdrawn from the cash value of a policy is tax-free equivalent to the premiums paid into the policy. The remainder can be accessed tax-free through loans made from the policy. If your policy lapses, taxes would then be due on any outstanding loans. If you were to pass on with an outstanding loan, the death benefit to your beneficiaries would be reduced by that outstanding loan amount. For many people, whole life policies tend to be an attractive option later on in life.


Many individuals will convert their term life policy to a whole life or universal life policy right around the time their term life insurance policy is expiring. This is meant to extend the life insurance policy and the protection it provides. As long as the insured makes their premium payments on time, they are guaranteed coverage by the insurance company. For most individuals with progressing multiple sclerosis, is not possible to obtain a new term policy, therefore converting an existing term policy to a whole or universal policy is often the only option. Keep in mind that when converting to a whole universal life policy, premiums will increase since it’s a permanent product. As long as you make your premium payments on time, the life insurance coverage will always remain.

Converting Part of a Policy

Because converting to a whole or universal life permanent policy can be more expensive, some people opt to convert only part of their term policy to a whole life policy to make it more affordable. This could be due to any number of reasons, and usually includes the idea that although people’s financial responsibilities have decreased later in life, they do still exist. The biggest reasons most people need coverage later in life are for burial expenses and to cover estate taxes for their heirs.

Whatever your reasons are for converting your existing policy, please contact one of our multiple sclerosis life insurance specialists today so that we may assist you with the process.