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Reasons to Convert Term to Whole Life Insurance

Your reasons for having life insurance may change over time, and if you’re considering converting your term life policy to whole life insurance, we’re here to help you better understand the benefits of making the switch. It’s about ensuring you have the right coverage to protect your loved ones’ needs.

  1. On screen: Person’s silhouette (blue) in the middle of the screen. Around them in a rotating circle of documents, each one with a big red question mark on it.

    Narrator: It’s the right time for life insurance – but you can’t decide which policy type is right for you.

    On screen: Continue from previous scene.

    One of the question marks transforms into a check mark. The rest of the documents disappear. The check-mark document expands to take up most of the screen, and the check mark transforms into the AmFam logo.

    Narrator: Luckily, American Family Life Insurance Company is here to help with all your life insurance needs!

    On screen: Continue from previous scene.

    Below AmFam logo, the following text appears:

    EXPLAINS LIFE INSURANCE:

    TERM VS. PERMANENT (knockout, blue font, all caps)

    Narrator: To start, there are two main types of life insurance: term life insurance and permanent life insurance.

    On screen: New scene.

    Text at top of the screen:

    WHAT IS TERM LIFE INSURANCE?

    (knockout, blue font, all caps)

    Below, we see a bar chart with bars at:

    • 10 years
    • 15 years
    • 20 years
    • 30 years

      (blue bars, labels beneath each bar)

    • (labels are blue, myriad, sentence case)

      Narrator: Term life insurance is a temporary policy that lasts for a set amount of time – typically 10, 15, 20 or 30 years. Term life only delivers a payout if the insured passes away while the policy is active.

      New scene.

      On screen: Text at the top of the screen:

      TERM LIFE INSURANCE PROVIDES COVERAGE DURING PERIODS WHEN YOU HAVE LARGER COVERAGE NEEDS

      (knockout, blue font, all caps)

      One by time, timed with the VO, three icons pop up in a triangular configuration:

    • House icon for mortgage
    • Three small silhouettes for children
    • Graduation cap for education

      Narrator: Term life insurance is perfect for when you want financial protection for a limited amount of time – for example, when you:

    • Have a mortgage or other big loan
    • Have children in the house
    • Or are paying or planning for post-secondary education

      On screen: Continue scene.

      In the middle of the 3 icons, a 4th icon of a dollar sign appears.

      Small, small text at bottom of screen (myriad):

      Narrator: Term life may be more affordable (or a lower price than) permanent life insurance. Contact your agent for more information. Plus, term life can be more affordable than permanent life insurance policies.

      On screen: New scene.

      AmFam’s four life insurance icons lined up (see this video at 0:06 - https://youtu.be/rwOJxJ3Vy3g )

      A blue box appears around Simplified Term Life and Term Life icons.

      Below the box, on-screen text (myriad, sentence case):

      For these polices, the premium and coverage amount stay the same for the entire term you choose.

      Once the initial term ends, you may renew the policy annually with increased premiums.

      Disclaimer in small font at bottom of screen:

      *Policies can be renewed up to the policy anniversary on or after the primary insured’s 95th birthday.

      Narrator: To meet your unique needs, American Family Life Insurance Company offers two types of term life insurance: DreamSecure Simplified Term Life and DreamSecure Term Life.

      On screen: New scene.

      Text at top of the screen:

      WHAT IS PERMANENT LIFE INSURANCE?

      (knockout, blue font, all caps)

      On left side, text: TERM LIFE

      Below this text, we see a blue heart with four small pop-up circles around it, labeled: 10 yrs, 15 yrs, 20 yrs, 30 yrs.

      On the right side, text: PERMANENT LIFE

      Below this text, a red heart surrounded by the circle arrow (see 0:48 of https://youtu.be/5u8nfmJS_Gc for the circle arrow)

      Text at bottom of screen:

      Permanent life insurance lasts your whole life (as long as premiums are paid).

      (myriad, sentence case)

      On screen: Permanent life insurance is another common type of life insurance. Whereas term only covers a set number of years, permanent life insurance can last your whole life!

      In fact, whole life insurance is one type of permanent life insurance.

      On screen: New scene.

      We see a line of silhouettes.

    • One silhouette with a graduation cap (college grad)
    • One silhouette with a big skirt, holding a bouquet of flowers and with a veil (bride)
    • One silhouette with a tie and/or briefcase (professional)
    • One silhouette with a cane (elderly)

    One-by-one, a shield with a heart inside of it appears above each silhouette.

    Narrator: Permanent life insurance can help provide financial protection at any – and every – point of your life.

    On screen: Continue scene.

    Next to college grad, a second silhouette + dog silhouette appears. Next to shield with heart, a dollar sign appears.

    Next to bride, a groom (in tux) appears. Next to shield with heart, a dollar sign appears.

    Next to professional, a second silhouette + 2 child silhouettes appear. Next to shield with heart, a dollar sign appears.

    Next to elderly, a second adult silhouette + 1 child silhouette appear. Next to shield with heart, a dollar sign appears.

    Narrator: It can help your loved ones cover things like funeral costs or paying off debts, can be used to leave a legacy to loved ones, and even builds cash value over time!

    Plus, with a variety of coverage options available, you can build a permanent life policy to fit your unique needs and specific budget.

    On screen: New scene.

    AmFam’s four life insurance icons lined up (see this video at 0:06 - https://youtu.be/rwOJxJ3Vy3g )

    A blue box appears around the Whole Life icon.

    Narrator: So it’s always a good time to consider a DreamSecure Whole Life Policy from American Family Life Insurance Company.

    On screen: Continue scene. Box from previous scene disappears.

    Show different combinations (e.g., second icon vanishes, with plus signs showing between first, third, and fourth icon…  then reset to all four icons, first and fourth icon vanish with a plus sign showing between the second and third, etc.)

    Narrator: It’s important to remember that term and permanent life insurance isn’t an either/or question – you can own multiple policies for even more customized protection!

    On screen: New scene.

    Lone red silhouette appears in the middle of screen. Next to it, pops in a second blue silhouette on one side and a dark gray house on the other side.

    At the top, a blue heart inside a shield, labeled DREAMSECURE SIMPLIFIED TERM LIFE

    (all caps, red, knockout)

    Narrator: For example, let’s consider Alexis. She and her husband just bought their first home, so they each get a DreamSecure Simplified Term Life policy for the duration of the mortgage to help make sure the other won’t lose the house should one of them pass away.

    On screen: Continue scene.

    A light blue baby appears in the arms of the first (red) silhouette.

    At top, a second blue heart inside a shield, labeled

    DREAMSECURE TERM LIFE

    A plus sign between the two hearts/labels.

    (all caps, red, knockout)

    Narrator: After the birth of their first child, Alexis decides to add a second term life policy – this time a DreamSecure Term Life – for additional coverage.

    Continue scene.

    On screen: The baby vanishes from the arms of the first (red) silhouette. A third, adult silhouette (same light blue as vanished baby) appears. It waves to the parents as it moves off screen.

    While the above is happening, the two hearts & labels vanish from the screen. In their place fades in a red heart inside a shield, labeled

    DREAMSECURE WHOLE LIFE INSURANCE

    (all caps, red, knockout)

    Narrator: When the kids grow up and move out, Alexis and her husband look toward their future. They decide now’s the perfect time to add a DreamSecure Whole Life Insurance policy.

    On screen: Continue scene.

    The middle (red) silhouette vanishes. The light blue silhouette re-appears and unites with the blue silhouette.

    Above, the red heart beats, and shields with dollar signs appear above the two silhouettes as well as above the house.

    Narrator: Decades later, When Alexis passes peacefully, her survivors – her husband and her children – have her whole life insurance policy to cover expenses such as funeral costs.

    They love and appreciate how well Alexis has taken care of them financially, even after she’s gone.

    On screen: New scene. Standard end card.

    AmFam logo.

    Text:

    Contact your Agent

    or visit AmFam.com

    Narrator: Ready to learn more about how life insurance can help make sure your loved ones are financially protected after you’re gone? Contact your American Family agent today.

    On screen: Policy Forms: ICC18-33 (10), ICC18-33 (15), ICC18-34 (20), ICC18-35 (30), L-33 (10)(ND), L-33 (15)(ND), L-34 (20)(ND), L-35 (30)(ND), L-33 (10)(SD), L-33 (15)(SD), L-34 (20)(SD), L-35 (30)(SD), ICC18-36 (10), ICC18-36 (15), ICC18-36 (20), ICC18-36 (30), L-36 (10)(ND), L-36 (15)(ND), L-36 (20)(ND), L-36 (30)(ND), L-36 (10)(SD), L-36 (15)(SD), L-36 (20)(SD), L-36 (30)(SD), ICC19-97 UL, L-97 UL (ND), L-97 UL (SD), ICC17-225 WL, L-225 (ND) WL, L-225 WL, ICC17-226 WL, L-226 (ND) WL, L-226 WL, ICC17-227 WL, L-227 (ND) WL, L-227 WL, ICC17-223 WL, L-223 (ND) WL, L-223 WL, ICC17-224, L-224 (ND) WL, L-224 WL, ICC17-228 WL, L-228 (ND) WL, L-228 WL

    Life insurance underwritten by American Family Life Insurance Company, 6000 American Parkway, Madison WI 53783 | © 2020  019494

What’s the Difference between Term Life and Whole Life Insurance?

Before diving into the benefits of converting your term life policy into a whole life policy, it’s important to recognize the differences between the two. Let’s take a look.

Term life insurance. Also known as temporary life insurance, term life offers coverage for a specific time period, commonly in terms of 10, 20 or 30 years. You’ll choose the term length when you buy the policy, and your beneficiaries will receive what’s known as the death benefit if you pass away within the term.

Usually, the coverage amount and the premium remain the same throughout the term. This is a more affordable option than whole life insurance, and is designed to protect your loved ones when they are dependent on you or to cover temporary obligations.

American Family Life Insurance Company offers DreamSecure Simplified Term Life Insurance and DreamSecure Term Life Insurance — both are affordable, temporary protection.

Whole life insurance. Whole life provides coverage for your entire life and has the ability to build up cash value within the policy.

Though it’s more expensive than term life insurance, you’re guaranteed coverage as long as the policy stays in force, whereas term life insurance only provides coverage if you were to die within the coverage term. Your premiums will always remain the same, regardless of changes in health or age. And the cash value grows, tax-deferred, at a guaranteed rate. And the cash value grows, tax-deferred, at a guaranteed rate. Learn more about the benefits of whole life insurance.

Get a better idea of our coverages by comparing options with our life insurance comparison chart.

When to Convert Term to Whole Life Insurance

Many people choose to convert their term life insurance policy (or a portion of their term policy) to permanent life insurance to ensure that they have coverage to pay for final expenses no matter how far down the road it may be needed or to guarantee some sort of financial legacy is left to their heirs. Here are a few other key items to consider when choosing to convert term life to whole life insurance.

Cash value. A popular reason many people convert term life insurance to whole life insurance is to take advantage of the cash value feature. Whole life not only guarantees the life insurance benefit, but you have the ability to borrow against the cash value that accrues over time, if needed. (Note: loans or cash value withdrawals may affect the policy’s death benefit and could require the need for additional premium payments to keep the policy in force.)

In comparison, term life insurance is like renting a home, where you make monthly payments but don’t get anything in return once the lease ends. On the other hand, whole life insurance is like buying a home. But instead of gaining equity, the cash value of a whole life policy grows over time and you’ll have guaranteed coverage for your whole life.

Health matters. If your health has declined over the years, you might not be eligible for life insurance when your term life policy expires or it could be much more costly. Usually, if you convert your term life to a whole life policy, you can do so without having to take a medical exam. You’ll learn more below about how a convertible insurance policy works.

Lifelong dependents. If you’re taking care of lifelong dependents, like a child with special needs, you might want to convert to a permanent policy that covers your whole life, so you can help financially protect their future in the event you pass away.

What Is a Convertible Insurance Policy?

A convertible insurance policy, like American Family’s DreamSecure Term Life coverage, allows you to convert a portion or all of your existing term life policy to a cash value policy at some point during the conversion eligibility period. The perk? You can do this without having to take a medical exam or go through other screening that could affect your eligibility if you’ve developed certain health conditions. This delivers the benefit of having a less expensive term life insurance policy to begin with, while still being able to convert to a long-term policy later when your insurance needs and financial means change.

You’ll want to make sure to convert before the conversion deadline in the term life insurance policy. Some companies only allow conversion within a specified conversion window, such as the first 10 years, while others allow it at any point during the term. It’s more affordable to do so when you’re younger because premiums for life insurance policies become more expensive as you age. If you are over the age of 50, you may want to consider a senior whole life policy

So, take a look at your current budget and the financial obligations of your family to help you decide the best coverage to financially protect your loved ones. Your American Family Insurance agent is available to help answer questions about converting American Family Life Insurance Company life insurance coverages, and they’ll work with you to decide your best possible option.

Policy Forms: ICC18-33 (10), ICC18-33 (15), ICC18-34 (20), ICC18-35 (30), L-33 (10)(ND), L-33 (15)(ND), L-34 (20)(ND), L-35 (30)(ND), L-33 (10)(SD), L-33 (15)(SD), L-34 (20)(SD), L-35 (30)(SD), ICC18-36 (10), ICC18-36 (15), ICC18-36 (20), ICC18-36 (30), L-36 (10)(ND), L-36 (15)(ND), L-36 (20)(ND), L-36 (30)(ND), L-36 (10)(SD), L-36 (15)(SD), L-36 (20)(SD), L-36 (30)(SD), ICC17-225 WL, L-225 (ND) WL, L-225 WL, ICC17-226 WL, L-226 (ND) WL, L-226 WL, ICC17-227 WL, L-227 (ND) WL, L-227 WL


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Related Topics: Whole Life , Term Life , Buying Life Insurance