Convertible term life insurance is a flexible insurance product that allows policyholders to transition from term life insurance to a whole life insurance policy without the need for a new medical exam.
This feature can help protect your future income, secure your insurability, and even lay the foundation for an infinite banking strategy.
A convertible term life insurance policy is a type of term life insurance that includes a conversion option. This feature allows policyholders to convert their term policy into a whole life policy, without undergoing another medical exam or providing additional evidence of insurability.
Convertible term life insurance policies generally offer a conversion period, typically lasting for a specific number of years or up to a certain age, during which the policyholder can exercise the conversion option.
A convertible term can help you protect your future income and insurability.
Guarantee insurability: One of the main benefits of a convertible term life insurance policy is the ability to secure future insurability without additional medical exams or underwriting. This can be particularly valuable for individuals who may experience changes in health, as it ensures that they can maintain life insurance coverage even if their health deteriorates.
Lock in lower premiums: When you convert your term policy to a permanent policy, the premiums are based on your age and health at the time you initially purchased the term policy. This means that if you’ve experienced health issues or have aged since the policy’s inception, you can still lock in lower premium rates than if you were to apply for a new permanent policy.
Continuation of coverage: Convertible term life insurance enables policyholders to maintain life insurance coverage beyond the initial term. This ensures ongoing protection for your income and financial well-being, regardless of changes in personal circumstances or health status.
While term life insurance alone cannot be used for infinite banking, the conversion feature in a convertible term life insurance policy enables policyholders to transition to whole life insurance, which is the foundation of the Infinite Banking Concept.
Gradual conversion: Convertible term life insurance allows you to convert portions of your term policy into whole life policies over time. This strategy can help you gradually build cash value in multiple whole life policies, creating a foundation for infinite banking.
Flexibility: Converting portions of your term policy into whole life policies enables you to balance your insurance needs with your budget. You can choose the amount and frequency of conversions based on your financial goals and circumstances, allowing you to create a tailored infinite banking strategy.
Long-term financial planning: By using convertible term life insurance to transition to whole life policies, you can start building cash value and access policy loans for cash flow management, investing, or other financial needs. This strategy can help you create a solid foundation for your long-term financial planning and lay the groundwork for an infinite banking system.
Convertible term life insurance offers a unique combination of flexibility, protection, and long-term financial planning potential.
By allowing policyholders to secure their insurability, protect their future income, and gradually build a foundation for infinite banking, convertible term life insurance can be a valuable addition to your financial strategy.
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Michiel Laubscher & Laubscher Wealth Management LLC is not an investment advisor and is not licensed to sell securities. None of the information provided is intended as investment, tax, accounting, or legal advice, as an offer or solicitation of an offer to buy or sell, or as an endorsement, of any company, security, fund, or other offerings. The information should not be relied upon for purposes of transacting securities or other investments. Your use of the information contained herein is at your own risk. The content is provided ‘as is’ and without warranties, either expressed or implied. Michiel Laubscher & Laubscher Wealth Management LLC does not promise or guarantee any income or specific result from using the information contained herein and is not liable for any loss or damage caused by your reliance on the information contained herein. Always seek the advice of professionals, as appropriate, regarding the evaluation of any specific information, opinion, or other content.
