What Is A Conversion Credit On Life Insurance?

  1. 4330 POINTS
    Jerry Vanderzanden, CLU, ChFC
    Co-Founder, Coastal Financial Partners Group, California
    Some life insurance companies provide a conversion credit for policy owners of convertible term insurance to convert their policy to permanent (cash value) life insurance. The credit is an incentive which credits last year's term premium or some portion of it to the new permanent policy premium or as cash value. If made available, it will only be in the first few years of the term policy. It was once more common than it is today.
    Answered on May 6, 2013
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  2. 11783 POINTS
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    Larry GilmorePRO
    Agent Owner, Gilmore Insurance Services, Marysville, Washington State
    What is a conversion credit? It is something some life companies use as an incentive to convert your term policy with them into a permanent policy with them.  It is a marketing tool with the idea that roughly one months new premium creates an incentive to keep your insurance coverage with that carrier.
    Answered on May 6, 2013
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