Needs evolve. And your insurance should change with them. But deciding what product is best for you is a more difficult choice. There are benefits to retaining your term policy, but many people enjoy added protection by converting to a permanent life insurance policy.
Term insurance was designed to provide people with pure (death benefit only) coverage for a specified period of time. Premiums rise at the close of each coverage period to reflect increased age and underwriting considerations. Because some coverage is preferable to none, term can be an ideal solution for people with budgetary concerns, young people, or as supplemental coverage to an already existing permanent life insurance policy.
Permanent life insurance, in contrast to term, was designed to provide pure coverage in addition to other benefits, including dividend payments1 when the policy is issued by a mutual company such as New York Life, and loan and withdrawal privileges.2
Click here to consult with a New York Life agent about converting your term insurance to permanent insurance.
A short comparison list may help illustrate the differences between term and permanent insurance:
|Designed for short-term needs, or when funds are limited||Designed for long-term needs|
|You pay for pure death benefit protection, without cash value accumulation||Has cash value accumulation, which is accessible through loans or partial withdrawals,2 and may also be exchanged or surrendered for an annuity3|
|Inexpensive initially, with costs increasing at each renewal point||Premiums are higher, but remain level, regardless of age, for the life of the policy|
|Premiums are usually guaranteed only for the initial term||Premiums may be reduced or paid by surrendering dividends1|
|Term conversion privileges are available with most policies4|
New York Life has a number of products that can be tailored to your life. Many of them allow substantial flexibility, and have significant benefits beyond the death benefit protection.
Take a moment to evaluate the basic policies we have to offer, and see if conversion is right for you:
Whole Life Insurance is a traditional life insurance product that offers guaranteed cash values, a level premium, eligibility for dividends and generally provides income tax-free death benefits. Cash values in a whole life policy grow tax-deferred, and are accessible through policy loans.2
Universal Life Insurance policies allow policyholders to change coverage and premium payments, within policy limits, to allow greater flexibility. Like whole life, universal life insurance offers a death benefit generally free from income tax, its cash value grows tax-deferred and you may be eligible for policy loans and withdrawals.2
Variable Universal Life features similar policy coverage and premium flexibility options to Universal Life, while allowing policyowners to have premium payments allocated to a variety of investment options, including a fixed account. Additionally, variable policies provide a death benefit generally free from income tax, and cash value that grows tax-deferred, and is accessible through policy loans and withdrawals.2
1 Dividends are based on the policy's applicable dividend scale or interest crediting rate, which is neither guaranteed nor an estimate of future performance.
2 Loans and withdrawals may affect the death benefit.
3 These options are based on the type of policy purchased, its cash value accumulation and its contractual provisions.
4 New York Life allows partial attained age term conversion of certain other companies' policies, subject to terms and restrictions.
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Consult a Life Insurance Agent
At no charge to you, a New York Life Agent — professionally trained and experienced — can help you analyze your needs and recommend appropriate solutions through insurance and financial products and concepts. Request a no-obligation review with a New York Life Agent.
This material is being provided for informational purposes only. Neither New York Life nor its agents provide legal, tax or accounting advice. Please contact your own advisers for legal, tax and accounting advice.
|Term Conversion Education|