Converting Term to Whole Life Insurance?

[insurance82]

My mom owns business and she has life term insurance policy. Bank made her to purchase life insurance due to her age (she was 57 when she bought business and now she is 63). Few weeks ago we got call from agent and he wants to talk about converting her term policy into whole. I would like to know what are the pros and cons of this conversion? What are some things we should be careful of?

 

[STIBROKER]

My mom owns business and she has life term insurance policy. Bank made her to purchase life insurance due to her age (she was 57 when she bought business and now she is 63). Few weeks ago we got call from agent and he wants to talk about converting her term policy into whole. I would like to know what are the pros and cons of this conversion? What are some things we should be careful of?

Well first off....does she need it or have other policys....

 

[insurance82]

Well first off....does she need it or have other policys....

No she doesn't need or have other policy. She has put me as a beneficiery.

 

[STIBROKER]

No she doesn't need or have other policy. She has put me as a beneficiery.

was not suggesting needing another policy.....so this is her only life policy.....so if she wants to keep it then find out when the term runs out and her age when it does.....whats the cost to convert to a WL....and if she is healthy what options you would have with a new policy.......

 

[WinoBlues]

My mom owns business and she has life term insurance policy. Bank made her to purchase life insurance due to her age (she was 57 when she bought business and now she is 63). Few weeks ago we got call from agent and he wants to talk about converting her term policy into whole. I would like to know what are the pros and cons of this conversion? What are some things we should be careful of?

The pros and cons are really going to depend on which company the term plan is with, what plan they guarantee a conversion to, whether they give a conversion credit also how long she has left on the guaranteed level period.

Quick answer is, Con= higher initial cost. Pro= lock in long term coverage and price.

While this forum is a great place with many experienced agents. You really need to talk to an agent by phone for a bit so that they can advise you. It cost nothing and as I mentioned we have been doing this a long time.

Lee

 

[insurance82]

The pros and cons are really going to depend on which company the term plan is with, what plan they guarantee a conversion to, whether they give a conversion credit also how long she has left on the guaranteed level period.

Quick answer is, Con= higher initial cost. Pro= lock in long term coverage and price.

While this forum is a great place with many experienced agents. You really need to talk to an agent by phone for a bit so that they can advise you. It cost nothing and as I mentioned we have been doing this a long time.

Lee

i told him to send me all information so i can review and then go from it. I just don't know much about conversion so i thought I would ask here since there are so many experienced agents on this forum. First she decided to keep policy until she keeps running business but now she is thinking about to keeping it if whole policy premium is not very high.

 

[WinoBlues]

i told him to send me all information so i can review and then go from it. I just don't know much about conversion so i thought I would ask here since there are so many experienced agents on this forum. First she decided to keep policy until she keeps running business but now she is thinking about to keeping it if whole policy premium is not very high.

The price will be determined by the plan they allow her to convert to. A few have very good plan available for conversion. Sadly, most do not. Also many do not even have a true whole life plan to convert to. Some will only have Universal Life as the option. Then you need to know the difference between those plans and guarantees.

Sounds very confusing I am sure, to an experienced agent it is not. We can filter through all of this for you. The worst thing to do is to do nothing.

Oh, also there may be better options by shopping out the policy unless there are major health.

Lee

 

[tlmarketing]

If the bank required it, there is probably a collateral assignment on the policy so that their loan will be paid off first, and you as beneficiary would receive remaining portion of proceeds.

you should be careful of the agent..he should have just left a message that he was calling her to see how to generate another commission for himself.

If policy is still needed for bank, will current term last long enough until loan is paid off? If not and bank still requires, get another term policy.

 

[insurance82]

If the bank required it, there is probably a collateral assignment on the policy so that their loan will be paid off first, and you as beneficiary would receive remaining portion of proceeds.

you should be careful of the agent..he should have just left a message that he was calling her to see how to generate another commission for himself.

If policy is still needed for bank, will current term last long enough until loan is paid off? If not and bank still requires, get another term policy.

Yes current term policy will last long enough until loan will be paid off and there is collateral assignment so bank don't loose their investment. This whole conversion thing is confusing to me.

 

[xrac]

i told him to send me all information so i can review and then go from it. I just don't know much about conversion so i thought I would ask here since there are so many experienced agents on this forum. First she decided to keep policy until she keeps running business but now she is thinking about to keeping it if whole policy premium is not very high.

The whole life will be considerable higher but it will always be there and will never go higher. Any death proceeds are also tax free.