Most term policies include a conversion privilege that lets clients switch to permanent coverage without new medical underwriting. Too often it’s ignored until the term is about to expire. Planning conversions from the start serves clients better and creates new business for you.
Key takeaways
- Conversion lets clients keep their original health rating for life, with no new medical underwriting.
- Permanent premiums are based on attained age at conversion, so earlier is cheaper.
- Partial conversions over time keep costs manageable, and each conversion is a new sale.
The worst time to discuss conversion is after the client’s health has changed — plan it at the point of sale.
What the conversion privilege does
Term coverage lasts for a set period, such as 10, 20 or 30 years. Most term policies let the owner convert some or all of the coverage to a permanent policy without new medical underwriting, within the carrier’s conversion window. The client keeps their original risk class, no matter what happens to their health.
Plan it at the point of sale
One of our brokers talks about conversion during the first sales meeting. Together with the client, they decide how much permanent coverage the client will eventually want and how quickly they can afford to convert. Because permanent pricing is based on the client’s age at conversion, converting sooner costs less.
Use partial conversions
Clients don’t need to convert everything at once. For example, a client with a $1 million, 10-year term policy might convert $500,000 next year, another $250,000 in five years, and then decide near the end of the term whether to keep the last $250,000. Each step fits the budget and adds flexibility. Conversion rules, windows and eligible products vary by carrier, so check the contract.
Stay proactive
Many clients don’t know their term policy can convert. Reaching out is a reason to stay in touch, and it can lead to referrals from family and friends. Each conversion is a new permanent sale with new compensation. For clients whose needs have changed, see our life events that should trigger a coverage review.
Frequently asked questions
Does converting term life require a medical exam?
No. Conversion within the policy’s conversion period generally requires no new medical underwriting, and the client keeps their original risk class.
Can a client convert only part of a term policy?
Often, yes. Many carriers allow partial conversions, so a client can convert in steps as budget allows. Confirm minimums with the carrier.
How is the premium set on a converted policy?
The permanent premium is based on the insured’s age at the time of conversion and the original risk class, so earlier conversions cost less.
Reviewed by Tim Fuller on 2026-09-26
Tim Fuller
President, SRS Inc.
Tim leads SRS Inc., a full-service IMO (Independent Marketing Organization) and BGA (Brokerage General Agency), connecting independent financial professionals with life, annuity, disability income, and long-term care solutions from 60+ carrier partners.
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