Make good use of policy conversion and live your protection

Have you ever thought that when your income level is low, first buy term life insurance that can be converted in the future, and when the economic situation improves, then convert term insurance to whole life insurance; or when your children are independent , change the term insurance policy in hand to pension insurance, which can be achieved by switching the insurance policy. Please make good use of this function to flexibly serve your protection rights. Switching between funds with different risk levels can partially avoid investment risks caused by market fluctuations, or earn higher rates of return. This principle is well known to many people. For example, the current stock market is improving, and investors can convert some of the money market funds they originally held into stock-oriented funds. On the contrary, the reverse operation method is adopted.

When investors' personal income status or risk tolerance changes, they can also obtain fund products that are more in line with their own investment goals by switching businesses. If you change different fund investment varieties in the switching business provided by the same fund company, you will enjoy a larger fee discount than the normal redemption and repurchase business.

However, don't think that these are just "jihad" in the field of funds. In fact, in terms of family protection arrangements, you can also make your policy work for you by "switching the policy".

Conversion function to meet different needs

Many parents will arrange a child education fund insurance for their children. However, this type of regular coverage for a specific purpose often ends when the child turns 25. But children need more protection after the age of 25. So, have you ever thought about converting this children's insurance policy from many years ago to the whole life insurance policy your child needs in the future after your child graduates from college?

Perhaps your insurance awareness is good and advanced, and you bought term life insurance coverage for yourself early in your career. However, as your income increases and your age grows, do you feel that you need a pension insurance or endowment insurance more?

Perhaps you are middle-aged, the term life insurance you bought when you were young is about to expire, and you have never had an insurance accident during the years of coverage. At the same time, you understand that after the end of this regular protection, the premiums you have paid in the past ten or twenty years will not only be reassured, but will you not be able to return any penny in the future, do you feel that the premiums you have paid are a bit "wasted" already?

Or, your financial income has decreased and you cannot maintain the original insurance cost. Have you thought of ways to improve your insurance arrangement?

Think a little further. The price of insurance you have purchased in recent years has been relatively high. If some new insurance types developed in the future have lower rates and higher rates of return, do you think new products are what you need? of? How to convert an old policy into a new policy?

All of these problems may actually be encountered by policyholders. If you can find a "convertible benefit" clause in your previous policy, these problems may be solved.

Transfer children's insurance to other types of insurance to enhance the protection period

When children's specific insurance such as children's education fund is about to expire, the original insurance policy can be converted to other types of protection that adult children need in the future. Regular child protection extensions will continue to be effective in the future.

For example, all child insurance policies of China Life after August 1999 have this function. Its "China Life Elite Children's Insurance" stipulates: "During the validity period of this clause, the policyholder may convert this clause into a whole-life insurance, two-year insurance policy approved by the company at that time on the anniversary of the effective date of any year after the entry into force of this clause for two years. Full insurance or endowment insurance without underwriting."

Term life insurance is converted to other types of insurance, and part of the premium is recovered in disguise

Term life insurance is a consumer type of insurance, and once the protection period expires, no funds can be recovered. But don't forget that you still have some cash value stored in your term life insurance account. Therefore, if you apply for the conversion of the original policy into pension insurance, endowment insurance or whole life insurance that you will need in the future, you can convert the cash value in the original policy into other types of insurance in a disguised form. Premiums, so as not to pay premiums for a long time to the last bit of recovery money.

For example, Taikang Life Insurance's "Taikang Additional Term Insurance" stipulates: "In five years or more from the expiry date of the payment, the insured may apply to the company to convert the insurance into the whole life insurance contract that the company is selling at that time. , endowment life insurance contract or pension contract, and no insurability certificate is required."

The savings-type insurance is converted into a term insurance to maintain the validity of the protection

There is also a situation in which although you have purchased a pension with a higher rate After insurance, endowment insurance or whole life insurance, due to the decline of economic capacity, it is not enough to pay the required protection cost. In order to make the protection part of your own continue to be effective, you can rely on the cash value accumulated in the original various types of savings insurance to convert It is a regular type of insurance that requires less premium, so that your personal protection will continue to be effective.

In this case, some people may also recommend the two methods of "payment in full" and "prepayment in advance". However, although "reduced payment" ensures that the insurance period is the same as the original policy, the amount of coverage will be reduced; although "prepaid premiums" can keep the amount of coverage unchanged, the insurance period is uncertain. If the insured wants the risk coverage to remain unchanged and the insurance period to be as long as possible, then insurance type switching provides this option. When the savings-type insurance is converted into a pure protection-type insurance, although the stored value function is greatly weakened, the protection is still effective.

No secondary underwriting is required for policy conversion

"Since the cash value in the policy (that is, the cash that can be recovered if the policyholder surrenders the policy) is used to purchase another insurance, why not directly use the first surrender policy , how about buying another product you like?" Some people may have such questions about the policy conversion function.

This question is actually a good one. This is the principle of redemption for policy conversion. But the benefits of policy switching are obvious compared to returning the old policy and buying a new one.

The biggest advantage of using policy conversion is that it does not need to be underwritten again before the new policy becomes effective. When we are young, our bodies are relatively healthy, and we can pass the underwriting when purchasing general insurance. However, with age, most of the health conditions will deteriorate. At this time, if you buy some insurance, you may face the possibility of increased fees or even refusal of insurance. If you cancel the old policy and buy a new one, this will happen.

And if you choose a term life insurance with convertible function when you are young, and you want to convert to whole life insurance or pension insurance after a few years, you can unconditionally exercise the policy convertible right, and the insurance company has no right to request You take out the guarantee certificate, and the rate is calculated according to the underwriting level when you first applied for the insurance. That way, you can get the new coverage you've come to expect at a lower rate.

Such a function is very valuable for young people who have just married and need long-term death protection, but are currently unable to pay high premiums. At the same time, it can also reduce the losses of some policyholders who have the idea of surrendering.

In terms of the rate of the new policy after the conversion, because "fat water does not flow to the outside world", the insurance company will generally give some discounts, such as a 5% discount. For example, when switching between different products in the same fund company, the rate will be discounted.

Pay attention to the timing of conversion

It seems that convertible benefits are quite attractive, but this kind of conversion will have cost pressure on the insurance company, and it is not conducive to the operation of the company's premiums for the policy. , so it will limit a certain period and number of times. For example, a fund company restricts its own funds to switch between several funds at most a few times a year.

Generally, this conversion does not begin until two years after the policy has been in force. On the other hand, some companies have such clauses that the insured no longer enjoys this benefit after the insured reaches the age of 45 or 60. There are also terms that stipulate that the original insurance premium will no longer have this right two years before the expiration of the payment period. If you need to switch policies, you must take advantage of the interim period.

If the customer wants to exercise this right, he only needs to provide the insurance contract, the latest insurance premium payment certificate, the identity certificate of the insured and the insured, and the identity certificate of the trustee (if entrusting another person to do so), then the company can request the company to make the conversion formalities.

But one thing needs to be reminded, for policyholders who purchased high-interest rate insurance products in 1997 and 1998, they should not convert them to other low-interest rate policies later, so that they will not be able to enjoy the long-term future benefits of the original policy. Value returns. If the insured purchases medical insurance, there is currently no medical insurance policy in China that provides such a convertible mechanism, so it cannot be converted yet.