Life insurance is a must for virtually everyone, though there are different types of life insurance and no one-size-fits-all.
If you’re looking into life insurance, you may be wondering, is term life insurance a permanent policy?
Permanent Life Insurance vs. Term Life Insurance
There are two main types of life insurance: permanent and term. Like their names imply, permanent life insurance lasts for the insured’s entire life (as long as premiums are paid on time), while term life insurance lasts as long as the term period specified in the policy. Term lengths vary depending on the policy.
Renewable Term Life Insurance
There are term life insurance policies that have the option for the insured to renew their policy at the end of the term, and some term life insurance policies are automatically renewable. Be sure to understand the conditions of any life insurance policy you purchase to know if it is renewable or if it automatically renews.
Converting Term Life Insurance to Permanent Life Insurance
Term life insurance can often be converted to a permanent life insurance policy. If you want to convert your term policy to a permanent one, you need to check the conditions of your policy to see if it can be converted, check the term conversion period (the period of time you’re allowed to convert the policy), and contact your insurance agent or the insurance company to convert your policy.1
Once you convert your policy, your premium will typically increase (permanent life insurance is usually more expensive than term life insurance). The amount of your new premium depends on factors like your age at the time of conversion and the benefit amount you want to convert.
If you’re wondering if your term life insurance policy provides permanent coverage, the short answer is not usually. However, you may have the option to renew your coverage at the end of the term period or to convert your term life insurance into a permanent policy.
If you have any questions about renewing or converting term life insurance, contact a licensed insurance agent.
Categories: Insurance, Life Insurance, Term Life Insurance