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Houston TX convertible term life insurance is a type of term life insurance policy. If you plan on getting another insurance plan after your original term insurance policy expires, then getting a convertible plan can save you some trouble. As the name implies, you’ll be able to convert your current policy to a permanent one.
This policy isn’t to be confused with a renewable term policy. Renewable policies will allow you to refresh the current policy for another term. Usually, that means the premium amount will also increase to adjust to your current circumstances.
Convertible policies will switch from a temporary plan to a permanent one. However, if you choose not to, you can allow your term policy to expire instead.
To make sure if this type of plan is meant for you and your family, you should discuss it with an insurance agent. Contact an expert with Best Life Insurance Houston Agency. They’ll be able to answer any questions you may have about the right insurance plan for you.
Houston TX Convertible Term Life Insurance
What is term life insurance? In the big scheme of life insurance, it is the simplest to understand. Term life insurance is an insurance policy that will only protect you for a certain period of time. Usually, this period, or term if you will, can be anywhere between 10 to 30 years.
Often called “pure life insurance,” it only guarantees that your dependents will receive a death benefit in the case of your passing. There’s no added cash value or any other benefit that permanent life insurance plans have.
However, term life insurance is usually the most affordable insurance plan because there aren’t any benefits besides the death benefit. It’s an easy way to purchase a significant amount of coverage for a price within your budget.
How It Works
When you buy term life insurance, your insurance company of choice will decide on the premium you’ll be paying throughout the term. That amount is based on the policy’s value (i.e., the payout amount), your age, gender, and health. And in some cases, they’ll even require a medical exam before proceeding. In other cases, they may also ask about your driving record, current medications, smoking status, occupation, hobbies, and family medical history.
Once they determine the premium and death benefit amounts, they won’t change through the policy’s lifespan. If you die during the term, the insurer will transfer the death benefit to your dependents tax-free. At that point, your beneficiaries can use the cash to settle your healthcare and funeral costs, remaining debts, or replace lost income.
The best-case scenario would be that your family didn’t won’t need the term policy. As the policy comes closer to its end, you’ll need to make a decision. Generally, that could be one of three choices. Either you let the policy expire and let it be, or you could renew it for another term, or you could convert it to a different type of plan.
Still Have Questions About Term Life?
Most term life insurance policies will include the option to convert it. Usually, that means you’ll be able to change it to a whole or universal plan while skipping the health qualification process. It’s a good idea if you couldn’t afford permanent life insurance from the get-go or if you couldn’t decide if having permanent life insurance was good for you.
If you decide to go through with the conversion, the permanent policy you choose will usually have the same value. However, the permanent policy will have higher premiums. Even before you convert, often enough, Houston TX convertible term life insurance plans are more expensive than standard term life policies.
The most valuable feature is the ability to skip the health qualification process when switching policies. If your health declines during the term life policy, you can change to a permanent life policy that you might not have qualified for the usual way.
Once you change to a permanent life plan, your coverage will now extend to a lifetime. So long as you pay the premiums, you’ll be protected. Not to mention, now that you’re on a permanent life plan, your policy will now accumulate cash value.
How convertible term life insurance policies operate:
Every life insurance company has a different procedure on how to convert policies. Usually, however, it isn’t too much of a hassle.
First, you should contact your agency about what permanent conversion options are available to you. You could convert to whole or universal life insurance, or you might only have one option depending on the company. Or, they may only allow you to convert a portion of your term policy to a permanent one.
Now, you’ll need to make sure when you’re able to convert your policy. Some policies will allow you to convert them whenever. However, some others will give you a specific window.
Outside of that window, you won’t be able to convert them. If you find that there’s a deadline, make sure to decide whether or not to convert your policy before you reach it.
To Sum Everything Up
Term life plans are optimal if you only want or need coverage for a set amount of time. However, in case of anything happening or to make the process less of a hassle later in life, you could choose to buy a convertible term life policy.
These policies will allow you to change your term life plan to a permanent one. There might be certain limitations depending on the policy, but you’ll be able to enjoy the benefits of a permanent insurance plan once you convert. The most significant feature is that you can skip the hassle of getting your health reevaluated when converting.
Typically, if you allowed your term policy to expire before shopping for another insurance plan, you would have to go through the health check again. But with convertible plans, you can skip that step entirely. That’s what makes Houston TX convertible term life insurance plans optimal if your health declines during your term policy’s lifespan.
Houston, TX Fun Facts:
- The scale replicas of the Chinese tomb warriors that used to line the Forbidden Gardens were sold off for $100 each.
- More Bibles are sold and produced in Houston than in any other city in the nation.
- The fancy Houston Heights neighborhood has a Quaker church in its midst. The Live Oaks Friends Meeting has, on average, 75 attendees each week.
- Check out the official website for more information.