When you bought, chances are it made perfect sense. You wanted to help ensure your family would be taken care of if you died while you were still working.
Term life contracts are exactly what they sound like – they expire after a set time period, or "term." Maybe that time is quickly approaching. And maybe you're wondering if there's another option to help you protect your loved ones. You've probably heard of other forms ofsuch as whole life, universal life or variable life. Depending on your current policy, you may have even heard of a conversion feature.
Some term insurance contracts have that feature. In a nutshell, it allows you to convert your term contract into permanent insurance. And unlike term life, permanent life insurance can last for your lifetime.
Permanent insurance can be an effective way to help supplement your retirement income and cover long-term financial concerns.
Unfortunately, there's no one-size-fits-all answer. But here are three factors to consider:
One advantage of permanent insurance is its ability to build cash value that you can tap as needed.1 For example, it can help your family cover estate taxes and funeral expenses if a loved one passes away. It may also help in situations where you have to pay ongoing expenses, such as those of a child with special needs.
According to the U.S. Census Bureau, life expectancy has been on a steady rise over the past several decades (although it has plateaued a bit of late). With that in mind, permanent insurance can be an effective way to help supplement your retirement income and cover long-term financial concerns, such as a spouse's illness. In that case, conversion could keep you from passing on massive expenses when you pass away.
Say your health is declining and you're still covered by a term contract. A degenerative disease, for instance, could make it impossible for you to renew when the term is up. Conversion might not require you to undergo a medical exam. (Be aware, however: You'll likely have to convert before a specific deadline to qualify for this exemption.)
Here's something else to consider: Many term life contracts allow you to convert just a portion of your contract. The result is "blended" insurance that combines whole and term.
Converting is a decision that demands some consideration. You'll need to evaluate your life circumstances and those of your loved ones before you decide if – and when – to convert.
That's where a Thrivent Financial professional can help. He or she can review your life insurance contract regularly to see if it fits through life's every stage.
Disability income insurance can help you continue to pay bills and other expenses if you're unable to work for an extended period of time.
We can help you explore a variety of annuities – tools that offer ways to save for retirement and generate an ongoing income stream.
Your insurance strategy can help provide protection and flexibility for you and your family. In particular, cash value life insurance can provide a range of options. And getting cash out of your life insurance may be easier than you think.
Change is inevitable. When it happens, life's big events – the celebrations and the disappointments – may be ideal times to consider if the life insurance you have is what you want. And what you need.
You can't necessarily call unexpected expenses "unexpected." They arise for all of us. If you're not prepared for such pitfalls, they can quickly derail your financial life. Having an emergency fund in place can provide valuable protection.
1 Life insurance proceeds may be subject to federal and state estate and inheritance taxes.
If requested, a licensed insurance agent/producer may contact you and financial solutions, including insurance may be solicited.
THRIVENT IS THE MARKETING NAME FOR THRIVENT FINANCIAL FOR LUTHERANS. Insurance products issued by Thrivent Financial for Lutherans. Not available in all states. Licensed agent/producer of Thrivent.
Loans and surrenders will decrease the death proceeds and the cash surrender value available to pay insurance costs. With partial surrenders, you generally will not have a taxable event until the accumulated value received exceeds the total amount of premiums paid. Surrenders may generate an income tax liability and may be subject to a decrease charge. A significant taxable event can occur if a contract terminates with outstanding debt. Contact your tax advisor for further details. Loans and surrenders may cause a contract to lapse or terminate without value. Loaned values may accumulate at a lower rate than unloaned values. Contractual charges may apply..