What a conversion privilege can do
Some term policies allow eligible coverage to be converted into an eligible permanent policy during a stated period, often without new medical underwriting. If health changes after the term policy is issued, that option may be valuable.
What conversion does not do
It does not lock in your term premium. Permanent-policy premiums typically reflect your age at conversion and the product selected. A conversion also does not automatically create a buy-sell plan, key-person arrangement or estate-planning strategy.
Questions to ask when comparing policies
- When does the conversion right expire?
- Is there an age cutoff?
- Which permanent policies are available?
- Is partial conversion permitted?
- Does a longer conversion period require a rider?
If a policy is assigned to a lender, coordinate any conversion or ownership change with the lender and carrier first. Learn more about SBA collateral assignment.