Life insurance term conversion is the option to trade in your term policy for permanent coverage without health evaluation, or evidence of insurability. Conversion becomes crucially important if you develop a health condition during your term period. Conversion is plan B to going back out on the open market to find coverage after the term period ends. Conversion is also called exchange. Generally you may convert all or a portion of your term coverage to permanent life insurance. Conversion is the quality feature to term life insurance. If two or more companies have very similar premiums, the next very important consideration is conversion.
Recommendation: Select a term product with conversion for the entire term length, for example 20 year term with conversion to year 20. Policy holders have a tendency to delay decisions on coverage options until the end of the term’s level premium period. If a 20 year term policy only offers conversion in years 1-18, that limitation may be a significant lost option when reviewing in year 20 as coverage runs out.
note: Conversion is to the end of the term period or to the age indicated below, whichever comes first.
Upper Tier
Prudential – recommended conversion to all permanent products contractually guaranteed
to the first policy anniversary on or after the insured’s 65th birthday; two terms can be converted into one Survivorship Universal Life policy;
Accordia – up to Age 75, all or part of the death benefit
Securian – to Age 75 with optional rider “Extended Conversion Agreement”:
Converts to any of our currently available permanent products (as of 8/23)
Second Tier – nearest age 70 (most carriers)
Cincinnati Life – through age 70 offers a Guaranteed UL for conversion
Lincoln National – to the earlier of attained age 70 (age nearest birthday) or the end of the level premium period
John Hancock – attainment of age 70
Pacific Life “PL Promise Term” to the insured attained age 70. “PL Promise Conversion UL” NLG age 121
Principal – to attained age 70 with Conversion Extension Rider, an optional rider at additional charge. Conversion is offered to any current available permanent products. Universal Life Flex III has NLG age 95
Protective: 10-year term: up to 8 years to convert; 15-year term: up to 13 years; and 20, 25, 30, 35-and 40-year terms: up to 18 years) Product availability may vary at the time of conversion
North American – (contact me for details)
Third Tier
American National – no later than the insured’s 65th birthday
American General – attainment of age 70, (note: policy holders of older product lines may have age 75 conversion): up to 8th policy anniversary for 10 year term; up to 10th policy anniversary for term lengths greater than 10 years
current conversion products:
“Protection Extend IUL” minimum face amount $50,000, an excellent conversion product having an age 121 Guaranteed Minimum Death Benefit Rider
“American Elite Whole Life 2” minimum face amount $1,000
Old Life Life Insurance Company is a subsidiary of American General Life Insurance Co. Old Life Life policy owners please contact me to review your conversion options.
MassMutual – 10th policy anniversary or age 65 anniversary; Extended Conversion Period (ECP) Term 15 ECP: 15th anniversary or age 65, Term 20 ECP: 20th anniversary or age 65, Term 25 ECP: 20th anniversary or age 65 ,Term 30 ECP: 20th anniversary or age 65. Couples can convert two existing MassMutual term policies to a survivorship policy to secure the joint lifetimes of the two insureds. Term conversions can be to second-to-die Survivorship Whole Life 100, Survivorship Whole Life 12, and SUL Guard.
Nationwide – attained age 65; for the 30 year term, first 20th policy year or attained age 65, whichever is earlier
Securian – 5, 10 and 15 year term: five year conversion period; 20 and 30 year term: 10 year conversion period. Note: conversion for entire term is available for an additional charge with rider “Extended Conversion Agreement”
Symetra – policy anniversary following the insured’s 70th birthday
United of Omaha
“United of Omaha Term Life Answers” and “United of Omaha Term Life Express”: 10 Year to age 74 or two years after issue, 15 Year to age 74, 20 Year to age 74, 30 Year 20 years after policy issue;
a 2005 issued “United of Omaha Priority Term 30” conversion 15 years after policy issue
Bottom Tier
Due to these companies treatment of existing policyholders, cost of insurance increases causing significant rate hikes, any conversions with non guaranteed elements to permanent life insurance should be considered with caution.
Genworth – to the insured’s attained age 75 on most term policies, whole life conversion only, face amount between $1,000 and $99,999,999, less than or equal to original face amount
Transamerica – 70th birthday (75th birthday on preferred plus class) product: Lifetime Whole Life (current 6/2022)
Voya – up to age 70 (see below)
Security Life of Denver: Voya Universal Life (Voya UL): $25,000 minimum death benefit (very favorable minimum)
ReliaStar Life Insurance Company of New York: Voya Universal Life – New York (Voya UL-NY) : $25,000 minimum death benefit (very favorable minimum)
Reliastar – contact me for details
Equitable – the policy anniversary nearest to attained age 70
Banner – For OPTerm 10, 15, 20, 25, 30, 35, and 40: up to attained age 70, one product, an age 121 Guaranteed UL, is offered
Please contact me for a free evaluation and quote. Any appointed carrier agent may be used to transact a term conversion. It does not have to be the writing agent who originated the coverage.
Licensed Agent: Sean Drummey
phone: (910) 328-0447
email: spdrummey@gmail.com
Note: Evidence of insurability may be required at conversion for a rider or a rider benefit, in particular a chronic illness benefit. Also the rider or benefit may have to be requested to be included. Be sure to double check rules on conversion rules for riders.
Minimum face amount allowed for conversion is a key factor in evaluating the merits of a carrier conversion options. Some carriers have a minimum conversion of $25k or $50k; others allow only a $100k minimum. A $100k permanent policy can be expensive, so may make conversion impractical. Keep in mind current conversion rules should only be viewed as a quality indicator. Carriers may change their minimum face amount at their discretion at any time in the future.
Attained age: rates for age last birthday, i.e. current age
Nearest age: age rate by nearest birthday, after half birthday considered a year older
Term conversion questions:
Partial conversion allowed?
Minimum face amount for partial conversion?
What products are offered for conversion?
No lapse lifetime guaranteed UL product offered? Note: many carriers offer non-guaranteed current assumption ULs or Indexed ULs
Option to convert to lifetime Indexed UL, Survivorship IUL?
Survivorship no lapse guarantee product offered?
If Survivorship product offered, are two term conversion into that product?
Conversion credits? Duration of conversion credit? (check AXA Equitable, Prudential)
Confirm rate classification
compare rates to applying for a new coverage with full underwriting if health permits
What benefits can be transferred without evidence of insurability?
What benefits on the new coverage require evidence of insurability? Note: pay close attention to this with chronic care rider
updated: 12/12/2023 – subject to change – Conversion product selection and premiums are subject to change at carrier’s sole discretion. There has been a considerable amount of change to carrier conversion options over the years, and that is likely to continue.
United of Omaha: revised 12/12/2023
Pacific Life: revised 12/1/2023
Principal (Principal National Life Ins. Co.) revised 12/1/2023
MassMutual revised 10/30/2023
American General revised 10/11/2023
Securian: revised 8/31/2023
Genworth: revised 7/25/2023
American National: discontinue new term life sales 12/1/2022
Transamerica: checked 6/28/2022
Protective Life revised 8/10/2021
Symetra entered 8/10/2021
John Hancock checked 8/10/2021
Lincoln National: checked 8/10/2021
Banner: checked 8/10/2021
Voya: revised 4/24/19
Accordia checked 7/17/18
Principal – (Principal National Life Insurance Company) as of June 2021, no longer sells life insurance to individual customers; still services existing customers