Posted: Fri Jul 25, 2008 2:34 am Post subject: Why would you want to convert a term policy for a UL?
I was told by an insurance agent that if you get sick you can convert the policy to a UL? What is the benefit? What other benefits apply like pro's and con's for this conversion feature?
Universal life is a very flexible and customizable life insurance product. If you need permanent coverage at some point it could become an invaluable option.
Not all UL is created equal though!
Ontario Broker _________________ I am an insurance broker from Ontario licensed for all types of insurance.
I was told by an insurance agent that if you get sick you can convert the policy to a UL? What is the benefit? What other benefits apply like pro's and con's for this conversion feature?
tjjes, what the agent was attempting to communicate to you is that if you become uninsurable you could convert the term policy to a permanent plan within the same company without new evidence of insurability.
Every person on the planet runs the risk of developing some type of medical problem that will render them un-insurable. Once a person becomes un-insurable they are stuck with the last life insurance policy they bought.
Level Term Insurance (10, 20, 30 year) becomes virtually unaffordable once the initial term expires and if one can't qualify for new coverage they are stuck.
As time permits today I'll come back to this thread and post actual premium rates for the 11th, 21st and 31st policy years for level term.
This is a great topic! _________________ Gary Spicuzza, *SAFE
Copyright 1956.
No rights reserved.
*Self Appointed Financial Expert
Okay....so what happens when a person buys term life insurance and still needs or wants the life insurance coverage after the initial term has expired?
Well fortunately with the products today the policy just doesn't end. Most change to annual renewable term, meaning the premium goes up each and every year until usually age 95...then the policy terminates.
Using male age 50 non-smoker rates here are the premiums for the initial term (10, 20 or 30 years) and what happens in the 11th, 21st and 31st policy years. Please note that I DID NOT quote the bait and switch Super - super - extra bestprefered rates advertized on TV. NOBODY (very few) "qualify" for those rates. Most persons end up in the standard rate class posted below.
10 year level term - $28 per month.
11th year................$163 per month. (age 61)
20 year level term - $53 per month.
21st year................$428 per month. (age 71)
30 year level term - $84 per month.
31st year................$1,194 per month. (age 81) _________________ Gary Spicuzza, *SAFE
Copyright 1956.
No rights reserved.
*Self Appointed Financial Expert
Hi Tjjes - The benefit of converting to a UL, other than there are no health questions, is that if you purchase the right UL, the coverage can last until the end of your life with no premium increases. (The premium will be higher to begin with because it's offering coverage for a longer period of time and because you would be older than when you first purchased the term). If you need insurance at the end of your life, at whatever age that would be, and you can afford it, it's better to buy UL to begin with.
The "con" side is just that it's more expensive, and you need to make sure it's guaranteed.
If you need insurance at the end of your life, at whatever age that would be, and you can afford it, it's better to buy UL to begin with.
Could EIUL be an option for me at the age of 63??
Or do you think its too complicated for me to understand at this age?
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