Can whole life insurance policy be converted to term life?
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Asked April 18, 2016
Many people take out a life insurance policy. Doing so has many benefits including allowing the person who holds it to pay off final expenses easily. Life insurance comes in many different forms. One common form is whole life. Another common form is term life. A person may wish to buy whole life insurance in which they pay for the policy upfront and then have it paid off no matter what and then build equity at the same time. Another person may wish to have term life in which they pay for the insurance on an annual basis and get no cash benefits from doing so.
As people grow, they may find their needs will change as well. Someone may have saved enough money to no longer need a whole life policy. In that case, they may want to covert it to a term life policy and perhaps cash it out. This kind of conversion is quite often done as people's life circumstances undergo varied changes. In order to find out if a whole life policy can be converted to a term life policy, it is best to consult with the insurance company that issued the policy. Doing so allows the person to be able to find out exactly how to begin this particular process.
Policies can vary depending on the company that issued the policy. Some insurance companies allow one policy to be converted into another policy easily while others may impose restrictions including asking policy holders to wait for a period of time before making such a conversion. A policy holder needs to be aware of such issues before they do anything else. This allows the person to find out if this is possible and to make sure it is done properly.
Answered April 19, 2016 by GWGLife