The Term-to-Permanent Conversion Strategy: A Laddered Approach to Coverage

For individuals who anticipate needing permanent coverage but cannot afford the full premium immediately, the **Laddered Conversion Strategy** offers a flexible, step-by-step approach. This involves converting portions of a large term policy into permanent coverage over several years.

Executing the Laddered Conversion

1. **Start Big:** Purchase a large term life policy (e.g., $1 million) to cover maximum current risk (mortgage, young children).
2. **Convert in Stages:** Convert a portion of the term policy (e.g., $250,000) into a Whole Life policy every three to five years, using the conversion privilege.
3. **Manage Cost:** This allows the policyholder to transition into permanent coverage as income increases, spreading the cost over time while maintaining the original health rating for the converted portion.

This strategy minimizes initial permanent costs while guaranteeing future insurability for the full amount.

Disclaimer: This content is for informational purposes only and is not financial or legal advice. Ensure you track the conversion deadline of the original term policy to avoid losing the conversion privilege.