Can I Convert My Term Life Insurance to Whole Life & What Are the Benefits?

If you are wondering – can I convert my term life insurance to whole life coverage – I’ve got some great news for you.

For the most part, this is possible if your policy has something called a conversion option. 

This is one of those topics that may not seem all that important when you buy your policy…

….but as you grow older details like this become increasingly more important. 

So check out my thoughts on converting term life insurance to whole life right now! 

My name is James Heidebrecht and I am the founder of Policy Architects. We are a small life insurance agency that services the needs of Canadians who would rather speak to a real person than deal with call centres and machines.

We are of the opinion that a client is a client for life – so we are not in the quota game. 

If you think all life insurance companies are created equal and that coverage is coverage I am here to tell you this is not the case.

All insurers have different approaches to underwriting and some are better than others for specific medical conditions. There is also a vast array of products, which means you want to speak to someone who gets that.

As you can see from our vast number of company reviews – we really enjoy this part of the job. So if you are looking to speak to agents who understand what’s out there call Policy Architects now.

Good news, this is absolutely possible with most life insurance policies in Canada. If your policy has a conversion option that is. 

Don’t worry, 99% of policies do but this is one of the many reasons you should read the fine print BEFORE you sign on the dotted line. 

A conversion option enables you to exchange your term coverage for permanent coverage (whole life is one such example) without having to take a medical exam! This is worth a LOT of money – especially if your health has deteriorated since you bought your term coverage. 

Think of it as a “get out of jail free” card. If God forbid, you become uninsurable, it’s you’re only option when it comes to securing insurance moving forward. It’s not important until you need and when you do, it’s VERY important. 

If you develop a life-threatening illness near the end of your term, you will not be disqualified from getting standard rates. Any new diagnoses will NOT cause your premiums to escalate. For example if you were 35 when you bought your policy and received a preferred plus rating and now your in your 60’s with medical issues you will not be penalized when you opt in to your new permanent coverage. 

There are many reasons why you might want to exercise a conversion option. This is why it’s important to have one if you think you may use it at some point.

1. You Have Become Uninsurable: It happens! As you get into your later years it becomes more difficult and more expensive to buy life insurance. What if your health has taken a turn for the worst and you still have needs at the end of your term. A conversion option gives you the opportunity to make sure your beneficiary receives a payout. The best part? There’s no underwriting involved and you’re guaranteed the same rating class when it comes to premiums.
2. You Have More Expendable Cash: You can finally afford the premiums and want to leave a nest egg for those you love. Remember there is no guarantee your beneficiaries receive a dime if you have term coverage.
3. Final Expenses: Ok your term coverage is coming to an end – but your burial and taxes are still gonna cost your family a pretty penny. A whole life policy can cover this expense and more.
4. Child with Special Needs: When you took out your term coverage you were footloose and fancy free. Now you have a child with special needs that will continue after you pass on. Whole life insurance guarantees that some money will be left to care for your child.

This is NOT a finite list. There are many other reasons you may opt to convert your term insurance into whole life insurance. Having a conversion option really is in your best interest!