Understanding Your Life Policy Options

People often need to increase their life policy coverage for any number of reasons. Situations change, and your coverage needs may increase or decrease. You may be having a significant life event, such as getting married or you may have taken on a mortgage to buy a new home. Whatever the reason, you’ve made the decision to increase coverage in order to have adequate protection.

Some policies allow you to add onto the original policy, while other policies don’t allow for this option. You would need to buy an additional policy, or policies, in order to obtain increased coverage. A representative from the Connecticut life insurance company that you purchase policies from can help you through the process.

Changing a term life policy into permanent

You can convert a term life policy to permanent if your term life policy includes a conversion feature. A conversion feature allows the owner to convert a term life policy into a whole life policy that will last for as long as you continue to pay for the coverage. This feature does comes at an additional cost, giving you the benefit of being able to extend your coverage, without proof of your current health situation, which can be invaluable.

The premiums for your permanent life policy will be higher, at least initially, than what you paid for the same amount of term insurance. A portion of the permanent life insurance premium is used to build-up a cash value in the policy. The cash value can be used in a number of different ways, which includes allowing you to take out a loan against the cash value.

Term insurance, on the other hand, is very competitive with respect to premium rates.

Some term policies provide for “indeterminate” premiums. This means that the policy will set forth a schedule of maximum guaranteed premiums and the insurer can never charge more than the maximum premiums in your policy. However, the insurer intends to charge you the current premiums, which is less than the guaranteed maximum premiums in your policy. A Connecticut insurance company can help you determine the right type of policy for your current needs.