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CONVERSION PRIVILEGE IN A LIFE INSURANCE POLICY
Conversion privilege in a life insurance policy allows the policyholder to convert a term life insurance policy to a permanent one, such as a whole life or universal life policy, without submitting to additional medical underwriting. The conversion must typically be completed before the policy's stipulated age or date, and the new premium could be more expensive than the original term policy. If their health deteriorates and they are rendered uninsurable, the policyholder can keep their life insurance coverage.
Conversion Privilege In A Life Insurance Policy
The conversion privilege is a noteworthy feature that grants policyholders the valuable opportunity to convert their term life insurance policy into a permanent life insurance policy. This conversion can be executed without the necessity of undergoing additional medical underwriting, which is advantageous in cases where the policyholder's health has deteriorated, potentially rendering them uninsurable. The conversion privilege bestows individuals to secure their life insurance coverage even in the face of potentially worsening health conditions. This invaluable provision ensures the continuation of financial protection for their loved ones, irrespective of any adverse health developments that may arise. By preserving their life insurance coverage, policyholders can gain peace of mind from knowing that their beneficiaries will be safeguarded, regardless of fluctuations in their health status.
It is essential to know that conversion privilege is typically subject to specific stipulations. Policyholders are generally required to effectuate the conversion before attaining a specified age or a predetermined date as outlined in the policy contract. It is imperative to thoroughly review the terms and conditions of the policy and gain a comprehensive understanding of the available conversion options, including associated deadlines. Additionally, this will enable policyholders to make well-informed decisions regarding the conversion of their life insurance policy.
While the conversion privilege offers substantial advantages, careful consideration should be given to its potential impact on the premium. Converting to a permanent life insurance policy, such as whole life or universal life policy, may result in a higher premium than the original term policy. This premium increase primarily stems from the permanent policies extended coverage and supplementary benefits.
Despite the potential premium increase, the conversion privilege presents an invaluable opportunity for policyholders to secure lifelong coverage without needing further medical evaluation. Furthermore, it safeguards against unforeseen health issues that may arise, ensuring the perpetuation of financial security for the policyholder and their loved ones.
If you possess a term life insurance policy and are contemplating the utilization of the conversion privilege, we strongly advise seeking the counsel of a qualified insurance professional. Their expertise and guidance will prove instrumental in navigating the intricacies of the conversion process. By providing personalized advice tailored to your specific needs and circumstances, these professionals will assist you in making an informed decision regarding the conversion of your life insurance policy.
Note: the conversion privilege is an invaluable feature that empowers policyholders to adapt their life insurance coverage to suit evolving circumstances. By exercising this privilege, individuals can ensure long-term financial protection for themselves and their beneficiaries, thus fortifying their financial well-being.
Selling Your Life Insurance Policy Is An Important Decision
How do you know if you will receive the best offer when you sell your life insurance policy? The only way to know for sure is to apply to every licensed buyer in your state, which could be 10-35 different companies. And those direct buyers do not have your best interest in mind, they represent their investors. At Welcome Funds, we've leveled the playing field for policy owners. We negotiate the best offer for you by conducting an auction with these buyers. When buyers complete, policy owners win! One application, multiple buyers, it's what we call...Life Settlements. Simplified.
Welcome Funds: Your Trusted Life Settlement Broker
Welcome Funds is a trusted and licensed life settlement broker. We understand that life can present unexpected challenges, and that's why we're here to help seniors turn their life insurance policies into much-needed cash. With over two decades of experience, Welcome Funds has been dedicated to serving the best interests of policyholders throughout the life settlement process.
Since our establishment in 2000, our experienced life settlement team has been tirelessly negotiating the true values of life insurance policies in the secondary market. We work closely with state-licensed life settlement providers, through our auction-based platform to ensure that the highest possible offer when selling your life insurance policy. Through our efforts, we have successfully helped thousands of Americans discover the living value of their life insurance policies, resulting in over $6 billion paid out to our clients.
See if you qualify now to sell your life insurance policy by completing our quick Life Settlement Qualifier or call us toll-free at 877.227.4484 to speak with a client care advocate.
LIFE SETTLEMENT BLOG
Direct Life Settlement Buyers vs. Welcome Funds – Advisor Beware!
Posted: by John Welcom
Welcome Funds has the privilege of working with numerous financial advisors and wealth managers – and have done so for two decades – some who exclusively focus on servicing high net worth clients. One such advisor who is active in the life settlement market — and already understands the value he can create for his clients — had historically negotiated directly himself with two or three leading buyers of life insurance policies. He thought that simply engaging with mor...
How to Sell Your Life Insurance Policy for $4,743,000 Instead of $275,485?
Posted: by John Welcom
Mr. Williams purchased $10 Million in life insurance coverage in 2001 to provide his family with financial security. Over time, his financial priorities changed: his wife passed away, his children became financially independent, financial burdens arose and the estate tax exemption increased substantially.
Suitability of Life Settlements
Posted: by John Welcom
Traditionally, estate planning advisors counsel their high net worth clients to obtain life insurance policies with large death benefits. The strategy is simple: create a vehicle for heirs to receive tax-free income at the time of an insured’s passing so sufficient funds are available to pay large estate tax bills when assets are inherited.
What is the Most Suitable Exit Strategy for Life Insurance?
Posted: by John Welcom
All eyes in the life insurance agency and the financial advisory world have been on New York, where in the summer of 2019, the New York State Supreme Court paved the way for implementation of Insurance Regulation 187. This rule imposes a new standard for agents and brokers when issuing a recommendation to a client regarding an annuity or life insurance product.
How to Get the Highest Life Settlement Offer
Posted: by John Welcom
When you decide to sell a valuable personal asset, you usually want to obtain the highest purchase price for that property. It is sound business sense. However, how do you truly know when you have reached the point of accepting and securing the most desirable offer?
Understanding the Fair Market Value of a Life Insurance Policy
Posted: by John Welcom
When a professional advisor identifies a life insurance policy that a client no longer needs or wishes to maintain, he should ask, as standard protocol, whether that policy may have value in the secondary market. If so, the client may be able to sell the policy in a life settlement transaction, enabling him to receive a higher cash payout than he otherwise would obtain by lapsing or surrendering the policy back to the insurance company.
The Power of a Life Settlement Auction
Posted: by John Welcom
Professional advisors with clients who no longer need or wish to maintain a life insurance policy have options when exploring the secondary market. Many advisors prudently rely on a licensed life settlement broker to assist them in the sale of the policy and with all aspects of the transaction. However, there is still a large number of professionals persuaded to work directly with only one buyer, called a life settlement provider.
Rebuttals to the “Direct Buyer” Model for Life Settlements
Posted: by John Welcom
Most professional advisors who explore the potential sale of an unwanted life insurance policy on behalf of their clients will rely on the assistance of a licensed life settlement broker. Life settlement brokers represent the policy owner in the transaction and have a duty to act in their best interests. Most notably, the broker’s and client’s goal is aligned: to sell the policy for the highest price possible.
Carrier Resistance To Life Settlements: Clients Need To Know They Can Sell Their Policies
Posted: by John Welcom
Consumers who sell their life insurance policies in the life settlement market receive as much as seven times more money than they would have received by surrendering their policies back to the insurance companies. Seven times! However, an estimated 9 out of 10 policies are allowed to lapse before paying a claim, according to the Life Insurance...
The Danger of Trying to “Time the Market” for Life Settlements
Posted: by John Welcom
Most investors in the stock market understand the danger of “market timing” — trying to choose the right day to buy a stock when the price is low and sell it when the price is high.
