The Little Known Life Insurance Feature You Might Need During COVID-19



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Price is the #1 thing people focus on during the life insurance buying process.  However, in these dire times of COVID-19, there is one VERY important feature of a life insurance policy which should not be overlooked when making a purchase decision.  

The term “conversion” feature.

In this article, I’ll tell you what the feature is, how to ensure it’s on any new policy you buy, and if you already have a policy, how to use it.

What is Term Conversion?

Most term life insurance policies on the market offer a conversion feature.  The conversion feature allows you to convert all or part or your existing term life insurance policy to a permanent life insurance policy such as whole life or universal life.  

Here’s the main benefit:

By using the conversion feature, there are no medical exams and you do not have to prove how healthy you are at the time you convert.  Whatever underwriting class you were approved at on your original term policy will carry over to your new permanent policy.  

For example, if you were approved at the best underwriting class on your original term life insurance policy, you will be the best health class offered on your new permanent policy even if you are currently unhealthy.   The premiums you pay for the new permanent life insurance policy will be based on your attained age at the time you convert.

BUYER BEWARE: Not every life insurance company offers the same conversion features on their term life insurance policies.  Some may allow you to convert at “any time during the level premium perold”.  Some may say only “ the first 10 years or to age 65 whichever is first”  Some very popular companies like Haven Life does not have a conversion feature at all on their term life products.  Be sure when shopping for life insurance to inquire as to whether your policy has a conversion feature and how it works!



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Why is the conversion feature of a term life insurance policy so important in these times of COVID 19?

Let’s say you bought a 10 year term life insurance policy nine years ago and it is set to expire next year.  Your thought at the time you bought it was that you would be healthy enough to renew it or buy another one.  The policy you bought was very inexpensive BUT had either no or a limited conversion feature.  Unfortunately you have a drastic change of health because you contracted COVID-19 and have been told by your doctors that you may still suffer from the side effects for a long period of time or maybe for the rest of your life.  

In the meantime, your term life policy comes up for renewal and you are now unfortunately not healthy enough (uninsurable) to renew or buy new coverage.  If your conversion feature has already expired you could be stuck without valuable life insurance protection at a time when you might need it the most.

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Conversion to the Rescue!

But what if you were still eligible to convert your term life policy?  

Despite your current poor health, you could convert all or part of your term insurance to a permanent policy if your conversion feature still existed. Yes it will be more expensive than the term life because it was converted based on your attained age and the policy is potentially locked in for the rest of your life.  However, at this critical time, you will still be able to keep your life insurance coverage intact and not have to worry about your life insurance coverage expiring. 



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3 Easy Steps to Convert a Term Policy

The process of converting a term policy to a permanent policy is fairly straightforward.  Simply contact your insurance company (or your agent who sold you the policy) and then follow these steps:

  1. Find out which permanent policies are available - Some companies offer several universal life and whole life insurance plans, but may only allow you to convert to one or two of their plans.  Some companies allow more.

  2. Request Quotes - request an illustration for the new permanent plan or plans.  You can typically buy as much permanent coverage as your current face value.  Many plans allow you to convert to a policy with a lower face value, which is sort of like “doubling down for less” in blackjack.

  3. Fill Out the Conversion Form - The application to convert your term policy is simple, usually only one to two pages long.  Remember they won’t be asking you any health questions and there is no medical underwriting, so it’s a quick and easy process.

Restrictions on Term Conversions

Please note that many term plans carry a time limit at which point, you may no longer convert your policy.  In some cases, you may have a maximum age or a maximum number of years (or both!)  For example, the conversion limits in a policy might read as follows in the “fine print.”

“Policyholder may convert to a permanent life insurance plan no later than 20 years after the policy date or when the insured has reached an attained age of 65, or whichever comes first.”


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Summary Of Term Conversions

Price is an import factor when making the decision to purchase a life insurance policy.  Don’t forget the old saying though, “You get what you pay for”.  Purchasing a term life insurance policy in this day of COVID-19  with no or a limited conversion feature is taking a big gamble when it comes to being able to keep your life insurance policy if you get sick.  In today’s world, it is better to make sure the life insurance policy you buy has a robust conversion feature that gives you lots of opportunity to convert the policy even if it costs you little more out of pocket. You will be very glad you have this feature if you ever become unhealthy enough to need it.  With all the unknowns associated with COVID-19, it could be one of the most important features you can have of your term life insurance policy.   


Written by:  Chris Lalor

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