Many people prefer to append greater flexibility to their life insurance plan by choosing a convertible life insurance policy. One should know that term insurance is a preferable option when one has a rigid budget, but is looking to gain protection through life insurance policy. However, if one is unwilling to expend money for term life insurance policy, to buy permanent life insurance policy later, they should think about a convertible life insurance policy.
All the way through one's life, financial necessities and abilities vary. That is why, the wise decision will be not to go for a permanent life insurance policy; instead a convertible life insurance policy is a better option. With convertible life insurance, one will be able to have the benefit of a term life insurance policy with an option to shift to a costlier permanent life insurance policy, when he/she finds it right.
Advantages of a Convertible Life Insurance policy
Through a convertible life insurance policy, one will be able to shift from a term life insurance policy to a permanent insurance policy at any time when the insured feels it right and he/she does not even need to go for a medical test. This flexibility will enable a person to change an existing policy in accordance with his/her financial condition. This will eventually allow an insured to get protection for his/her family, without sacrificing funds. This means that with existing term policy, one will always be in a position to convert the existing policy according to his/her financial condition.
Disadvantages to Convertible Life Insurance policy
One of the major disadvantages of convertible life insurance policy is that when the insured converts his policy from term life insurance to a permanent policy, he/she needs to pay a higher premium for that permanent policy.
That is why it is advisable that one should be pretty sure about the time to change life insurance policy. The insured should also know that all the term life insurance policies are not convertible.