Converting Term to Whole Life

meubanks

New Member
I have a relative who will soon be 75 years old and their term life insurance will run out. She may consider converting to whole life. My question is: Should she convert to whole life, when will cash value begin?
 
You might want to check and see if the term is still convertible? Many term policies have a conversion window and I have a feeling at 75 her window to convert may be closed.

Cash values usually begin appearing in the second year close. Before you worry about cash values, make sure you can actually convert.
 
Yes, agent said she WILL be able to convert. What policies do you think best at her age to convert to?

It depends on what her conversion options are. Some policies have limited options, others will allow conversion to any permanent policy currently offered by the company.

Also, you should check the term policy to see what it says about conversion. I can't recall seeing any policy that allowed conversion past age 70, but that doesn't mean it doesn't exist. Just that I haven't seen it. Also, the conversion clause will tell you what her conversion options are a well. Generally it will say either a policy or policies of the company's choosing or any permanent policy offered by the company at time of conversion. Ideally you want it to allow any policy, but that may not be the case.
 
Call the company and confirm. You'd be surprised how often the information is flawed. Or open the policy and read. If it ain't in writing, it ain't happening.

At her age I would look at a GUL if it's a conversion option or have them fund a UL to cover her up to a certain age.

She may have limited conversion options. She doesn't necessarily have to do a whole life, but it is really going to depend on what her contract with the insurance company allows.
The other thing, if she is still healthy, have a new policy outside of the conversion so you may have more choice available to you. The conversion option is great IF you have no where else to go. If you do, certainly look elsewhere to confirm the good deal.
 
I am working on some converts now. Would you say 55-60 is a good age to covert some or all of the term. Prices go up quick and health is not a given.
 
APRIL 7, 2016

I tried to start a new thread to ask this question, but the forum throws all 3 of my browsers a "500 bad code or site offline error" after hitting SUBMIT.

Anyway, here's my question, copied/pasted from the thread that wasn't..

Seeking Your Advice...

A Client purchased an Assurity $750,000 30 Year Term w/R.O.P. from me in 2012. Paying $250 @ month. He was age 41 then.

Today, Jim contacts me because Assurity sent him the "Convert All or Part of your Term to Whole Life", letter. He wants my advice.

Jim is 45, married, 3 teenage children, and a self employer landscaper/snowplower, with 3 employees.

My inclination is that he should just let the policy end at age 71, take the $90,000 R.O.P. and then decide if Final Expense coverage is feasible, or to just buy a pre-paid burial plan, or put the money in the bank.

I only sell a few life policies a year. What do you seasoned life insurance specialists think?

-Allen
 
$90,000 ROP is pretty nice, but at age 71, the $750,000 will be gone.

You could show a maximum CV accumulation whole life policy and it'll "break even" on a non-guaranteed basis around year 8. Still gotta pay premiums though.

If you were going to recommend getting a FE policy at year 71... why not lock in a better rate with better health and have it become a better asset at age 45?
 
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