Consider converting all or part of your term insurance to permanent coverage

Term life insurance provides pure insurance protection, often to cover a short-term need such as a loan or mortgage. Because it is the least expensive form of life insurance protection, term is often a useful solution when protection is essential, but dollars are scarce. For business owners, it can cover outstanding loans, shielding partners from financial hardship. People in their 20s and 30s or those with young families may buy term insurance for the pure protection it provides.

However, unlike permanent insurance, term doesn't build cash value. When the term of the policy ends, coverage expires without value or (if the policy is renewable) must be renewed at a higher premium. And while the initial cost of term insurance is lower than the cost of a comparable permanent life insurance policy, the cost of term coverage increases over time and can become prohibitively high at advanced ages, while the premium for many permanent policies remains level for life.

The Conversion Privilege
Most term policies include a conversion privilege that will allow you to convert some or all of your coverage to permanent insurance, and your insurability is guaranteed — even if you've become uninsurable. (When you convert from term to permanent insurance, you do not have to furnish evidence of insurability, or proof of your good health, as long as you are within the contractual conversion period.) In addition to accumulating cash value, permanent insurance provides a tax-deferred, guaranteed death benefit.

New York Life policy owners convert from term to permanent policies to satisfy a wide range of needs. We asked a few of them recently to share their stories.

• Case Study: Protecting a Young Family
• Case Study: Protecting the American Dream
• Case Study: A Life Philosophy of Giving

Is now the best time for you to convert to permanent coverage? Insurance premiums are partially determined by your age, and will therefore be higher if you convert later on. So sooner is generally better than later. Contact a New York Life agent today to learn more.

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