Speak with an experienced advisor! 212-573-5563Term life insurance often is touted as an affordable way to provide a financial safety net for loved ones who count on you for support. It costs less than universal life insurance because it provides coverage for a limited number of years rather than indefinitely. It’s also cheaper because term life insurance doesn’t have the cash value or internal policy charges that many permanent life insurance policies have. Term life insurance is a great way to provide coverage for your family for a period of time but as your life changes so do your needs. Now may be a great time to look into converting your term life insurance into a universal life insurance policy.
Why Would You Convert to a Universal Life Insurance Policy?
To Get Permanent Coverage
When you took out your term life insurance policy, your life and your financial needs dictated that term life insurance was best fit for you. Now, your children may be out of the house and through college, your mortgage might be completely paid off, your successful career has allowed you to have more income to protect your family, or maybe your spouse is also working again. Any one of these scenarios could have changed your financial life. Now, a universal life insurance contract may be a better fit for you as your expenses maybe have deceased and your income has increase. Thus causing a change that would make more sense to put more funds into a universal life insurance contract. Paying into a universal life insurance contract will put your loved ones in a situation where they are very likely to benefit from the death benefit compared to a term life insurance policy.
Protect a Pension
Many reitirees are faced with a decision when they retire – which pension option should they take? Should they take the maximum pension option – where their pension dies with them. Should the take “option 2” where they take a pay cut on the pension they could receive in order to allow the pension to pass onto their beneficiary in the event of their passing? An alternative to the “option 2” while still protecting your family would be converting your term life insurance to a universal contract. That way, you can still receive the max pension that you deserve and still protect your family financially if something were to ever happen to you. Additionally, the universal life insurance policy is flexible with who could be the beneficiary whereas pension options are often very strict and not flexible with who can receive the pension if something were to happen to you.
Health Took a Turn
When you convert a term life insurance contract to a universal life insurance policy, you do so at the rating that your received when taking out your term policy. Therefore, if in the time since you took out your term policy your health has took a turn for the worse it could make sense to convert your policy. When converting your policy there is no medical underwriting. This can be a saving grace for a family if a loved one has a term policy that is convertible to a universal life insurance policy.
Lifelong dependent
Perhaps your needs changed and now you have a lifelong financial dependent, such as a child with special needs. Universal life insurance can help fund a trust for that person after you die. This sum of money could allow your loved one to keep their life style up even after your passing
