Case Study: Term Policy Conversion

Don't assume, know clearly your term policy term conversion details.

At LifeInsuranceReview.com (LIR), we often get called in by financial advisors, attorneys, and CPAs when their clients are facing complex or urgent life insurance situations. In this real-world case study of term policy conversion, a husband and wife were referred to us by their financial advisor. One of the spouses had recently been diagnosed with Leukemia and had undergone a bone marrow transplant—a life-changing event that made it essential for both to reassess their existing term life insurance policies and explore new options.

They each had a 15-year term policy and believed, based on a phone call with their insurance carrier’s customer service, that they could convert their term policy into permanent coverage up until the end of the 15th year. Unfortunately, this was incorrect—and could have had devastating consequences if not caught in time.

Uncovering the Truth Behind Term Conversion

When our team at LIR thoroughly reviewed their policies, we discovered a critical detail: their term conversion option was only valid for 80% of the policy’s term duration—which meant their ability to convert ended in year 12, not at the end of year 15. This meant their conversion window had already expired in 2022, not in 2025 as they had assumed.

Had they waited even another month, it would have been too late to act.

The Value of Expert Guidance

Despite the unfortunate news about the expired conversion, our team was still able to provide solutions:

• We successfully reviewed and clarified the terms of both policies.

• We helped one spouse obtain a new term policy, even after the major health diagnosis.

• We are actively working on a strategy to get coverage approved for the other spouse.

This case highlights why it’s so critical to work with experienced, licensed professionals rather than relying on general customer service representatives—especially when the stakes are high.

Key Takeaways: Don’t Let These Mistakes Happen to You

If you or your clients own a term life insurance policy, here are four important lessons you need to know:

1. Don’t Rely on Customer Service for Complex Policy Questions

Most customer service reps are not licensed insurance professionals, and many are outsourced outside the U.S. They may not understand the specific nuances of your policy. In this case, a rep incorrectly told the couple they had until the end of the 15-year term to convert, which was not true.

2. Not All Term Policies Are Created Equal

Even if a term policy includes a conversion option, each insurer sets different rules. Some allow conversion only within a specific number of years or up to a certain age. Others limit the types of permanent policies available for conversion. Always verify the fine print.

3. Never Assume—Always Verify in Writing

Even if you’ve owned a policy for years, it’s easy to forget the details. That’s why we recommend reviewing the terms and conditions in writing and not just going by memory or verbal information. Documentation matters.

4. Cheap Term Policies May Come with Costly Trade-Offs

Many low-cost term policies with conversion options only allow conversion to inferior or high-cost permanent products, such as low-quality whole life or universal life policies. These policies are priced cheaply upfront because the insurance company knows your conversion options will be limited if your health changes.

Why Professionals and Consumers Trust LIR

At LifeInsuranceReview.com, our mission is to provide transparent, expert guidance when it matters most. We do more than just “check the boxes”—we analyze, verify, and educate. Our clients work directly with licensed professionals, never outsourced reps or third-party call centers.

Whether you’re facing a health challenge, exploring conversion options, or just want to make sure your current coverage is still working for you, we’re here to help.

9 out of 10 policies we review have opportunities for improvement.Don’t wait—schedule your personalized policy review today.

A Case Study: Term Policy Conversion FAQs

1. What is a term life insurance conversion?A term conversion allows you to switch your term life policy into a permanent life insurance policy—without a medical exam—as long as it's done within the conversion period stated in your policy.

2. Can I rely on customer service to explain my policy correctly?No. Many customer service representatives are not licensed and often provide incorrect or incomplete information. Always verify policy details in writing or consult with a licensed expert.

3. Do all term life policies include a conversion option?Not all term policies have conversion privileges. And among those that do, the terms, timelines, and eligible permanent products can vary significantly by insurer.

4. How can I find out when my term conversion option expires?Your conversion window is outlined in your policy contract. It may expire based on a specific policy year, age limit, or a set number of years from the start date. A professional review can help clarify this.

5. What if my conversion period has already ended?If your conversion window has expired, you may still be eligible for new coverage, depending on your current health status. Working with a trusted advisor can help you explore your available options.