Term, Whole Life, Conversions, What?

Ok, most people have at least heard of Term Life…and, most likely, those same people have heard of Whole Life Insurance. One of the reasons people buy whole life is to have something for the long haul but they want to try and grow money inside the cash account within the policy. Studies clearly indicate that one will grow more money in the markets and via other investment vehicles than in a life insurance contract. So, why spend all the money for a Whole Life plan??

The argument is that most people are not disciplined enough to set aside money to invest each month for future income and the convenience of the Whole Life plan provides the guarantees of cash accumulation and some death benefit.

What if you are already investing in an IRA or 401k? Do you really need to allocate the extra money each month into a Whole Life plan??? Is your need for life insurance purely for income or debt protection?

If it is the latter, simply buy the Term Life insurance without cash accumulation and protect your needs at a fraction of the cost of a Whole Life plan.

What most people don’t realize is that during the duration of the Term, one can convert the policy to a permanent Whole or Universal Life policy once they know that more income is available to support the premiums or if health changes and they need to keep coverage beyond the term duration.

There are no medical questions asked when converting Term Life and you maintain the original underwriting classification when you convert…you simply take on the cost of permanent protection at your attained age when you make the switch.

So, if you aren’t sure you want permanent or term, buy the term now, lock in the low low cost and underwriting classification and at a later date, simply sign a single page to convert some or pieces of the term to Whole or Universal Life later on…


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