Switching from term life to whole life insurance is a positive choice in most situations. Term life insurance is cheaper than whole life insurance and is normally purchased when an insurance policyholder does not possess the financial means to invest in the whole life insurance but needs to be insured to cover final expenses or a mortgage. While more expensive, whole life insurance provides cash value accumulations and policy loans. If you can afford the higher insurance premiums, whole life insurance might be a good investment for you.
Step 1
Find out if your term life insurance is convertible by reading your insurance policy. Contact your term life insurance agent if you need assistance with interpreting the policy. If your term policy is renewable instead of convertible, you can renew your term insurance but will not be able to convert it into whole life insurance.
Step 2
If it is possible to do so, inform your insurance agent you want to convert your term life insurance to a whole life policy. Check with your agent to see what types of whole life insurance policies are available as well as whether your agent is able to provide you the type of whole life policy you are interested in.
Step 3
Purchase a whole life insurance policy that is flexible in adjusting the policy's premium, face amount and protection length. Select modified whole life insurance if you want your premiums during the first couple years to be lower than usual, then make up for the difference with higher premium rates later when you foresee a shift in your financial situation because of kids growing up and moving away or an expected income increase. Pick a limited-pay whole life insurance policy if you would like to pay premiums for 10 to 20 years, then have your policy paid for and valid for the rest of your life. Select a joint life or joint life and survivorship policy if your spouse also needs insurance (you can also choose this option for siblings).
Step 4
Schedule a meeting time with your insurance agent. Carefully go over your current insurance policy together as well as the new policy options that are now available to you.
Step 5
Meet your children or other beneficiaries to include them in the discussion over which insurance premium you will purchase. Include your beneficiaries in meetings with your insurance agent and involve them in the decision on how you would like your insurance payouts.
Step 6
Give your insurance agent another premium if necessary (depending on the conversion value of your previous term policy and the cost of the whole life insurance policy you select).
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