Term Life Insurance Articles
Are There Policies That Mix Term Life And Whole Life Insurance Policies
2009-11-28
Buying term life insurance is a great way to provide some extra security for your loved ones in the event of your sudden passing. It's a wise purchase for the primary breadwinner in any family to consider. However, there's a very practical problem with term life insurance that can scare many potential buyers away from investing in it - any premiums that you pay into a term life policy are pretty much lost forever. You won't get a chance to get them back, and the only situation in which you'll see any benefit from your policy would be death (and in that case, it's more of a benefit for your beneficiaries).
Whole life insurance policies operate quite a bit differently. Under a whole life policy, premiums that are paid into a plan can be retrieved after a certain period of time by the policyholder (typically when he or she turns 65). Often, some amount of interest is returned with the insurance premiums. This can make a whole life plan a good investment. However, this sort of policy doesn't pay out as much money as a term life insurance policy. The differences between the two insurance types creates a sort of Catch 22 for consumers - it would be nice if there was some sort of plan that blended the best elements of term life and whole life coverage. And, as you might have guessed, there is such a policy.
Convertible term life insurance operates exactly like a term life insurance policy for the beginning of the plan. After a certain period of time, often decided by the consumer, the plan can be converted into a whole life insurance plan. Depending on the company that sells the insurance policy, some of the funds paid during the term plan go straight into the whole life insurance policy. This makes convertible plans a great alternative for consumers that are looking for a good blend between the policy types, and a safe investment from both directions. If the policyholder dies during the first years of the plan, the payout for the beneficiaries is more than sufficient. If the policyholder does not die, the benefits from the whole life investment become quite valuable.
Of course, in order to get a convertible life insurance policy, consumers need to keep an account in good standing with their insurance company. This means always making premium payments on time, and following any additional instructions that an insurance agent might give regarding the conversion of the policy. If a consumer can do these things, a convertible policy is potentially a much safer choice than a term life insurance policy, and a more all-encompassing choice than whole life insurance coverage.
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Buying term life insurance is a great way to provide some extra security for your loved ones in the event of your sudden passing. It's a wise purchase for the primary breadwinner in any family to consider. However, there's a very practical problem with term life insurance that can scare many potential buyers away from investing in it - any premiums that you pay into a term life policy are pretty much lost forever. You won't get a chance to get them back, and the only situation in which you'll see any benefit from your policy would be death (and in that case, it's more of a benefit for your beneficiaries).
Whole life insurance policies operate quite a bit differently. Under a whole life policy, premiums that are paid into a plan can be retrieved after a certain period of time by the policyholder (typically when he or she turns 65). Often, some amount of interest is returned with the insurance premiums. This can make a whole life plan a good investment. However, this sort of policy doesn't pay out as much money as a term life insurance policy. The differences between the two insurance types creates a sort of Catch 22 for consumers - it would be nice if there was some sort of plan that blended the best elements of term life and whole life coverage. And, as you might have guessed, there is such a policy.
Convertible term life insurance operates exactly like a term life insurance policy for the beginning of the plan. After a certain period of time, often decided by the consumer, the plan can be converted into a whole life insurance plan. Depending on the company that sells the insurance policy, some of the funds paid during the term plan go straight into the whole life insurance policy. This makes convertible plans a great alternative for consumers that are looking for a good blend between the policy types, and a safe investment from both directions. If the policyholder dies during the first years of the plan, the payout for the beneficiaries is more than sufficient. If the policyholder does not die, the benefits from the whole life investment become quite valuable.
Of course, in order to get a convertible life insurance policy, consumers need to keep an account in good standing with their insurance company. This means always making premium payments on time, and following any additional instructions that an insurance agent might give regarding the conversion of the policy. If a consumer can do these things, a convertible policy is potentially a much safer choice than a term life insurance policy, and a more all-encompassing choice than whole life insurance coverage.
