When we make the decision to obtain life insurance, it’s usually for specific reasons. Some of these reasons may be more short term, like taking care of a note at a bank, or making sure our kids go to the college of their choice or replacing our income in the event we were gone. Some of these reasons may be a little longer term, such as paying off the mortgage, or transferring wealth to our kids and grandkids or even continuing our contributions to our favorite charity or religious organizations.
Taking care of short-term obligations generally involves term insurance because it is time-period specific. But what happens at the end of the term, and we still need coverage? Generally, the coverage expires or can become renewable for a much higher premium.
Even if you’re purchasing term insurance to cover short-term obligations, you should be concerned about what kind of conversion privileges come with the contract because at some point in the future, you may become uninsurable. A conversion gives you the right to shift, or “upgrade” from term insurance to a permanent plan, regardless of your health.
Some contracts don’t allow you to convert. Some contracts require a full conversion to happen within the first few years. At National Farm Life, if the term contract is active, we allow you to convert at any time, at any amount. So, it can be done incrementally to suit your needs.