A term policy has secondary-market value only for as long as it can still be exchanged for permanent coverage. Buyers pay for death benefits they expect to collect, and level term almost always expires while the insured is alive. The conversion clause is what turns a temporary contract into an asset — and every conversion clause has an expiration date.
So the first job with a Midland National term contract is not valuation. It is locating one date and one list: the last day a conversion application will be accepted, and the permanent products the contract can be converted into on that day. Both come from the carrier, both should arrive in writing, and both are frequently different from what the owner assumes.
The second item on that list deserves more attention than it usually gets with this particular carrier, and the reason is explained below. What you can convert into materially affects what a buyer will pay for the result — sometimes by tens of thousands of dollars on the same face amount and the same insured.
In This Article
- Who Midland National is, and why servicing runs through the carrier
- The exact questions to ask, and why the answers must be written
- The ‘convert into what?’ problem at an indexed-products carrier
- Post-level premiums are not a strategy
- Sequence the transaction so you never pay a conversion premium on speculation
- Who this works for, and what to bring
- Frequently Asked Questions
Who Midland National is, and why servicing runs through the carrier
Midland National Life Insurance Company traces its origins to 1906 in Watertown, South Dakota. Its administrative operations run from One Sammons Plaza in Sioux Falls, South Dakota, and the company redomesticated to Iowa in 1999, making the Iowa Insurance Division its domiciliary regulator and the agency that conducts its periodic financial and market conduct examinations. It sits inside Sammons Financial Group, a subsidiary of the privately held Sammons Enterprises, Inc. of Dallas, Texas, alongside sister carrier North American Company for Life and Health Insurance.
Distribution is the detail that matters day to day. Midland National sells through independent agents and independent marketing organizations rather than a captive career force. Ten or fifteen years after a policy is written, the agent who sold it has often moved agencies, changed carriers, or retired, and the marketing organization that supported the sale may no longer exist. There is no branch office to walk into.
The practical consequence: treat Midland National policyowner service as the only authoritative source for your contract’s terms. Do not rely on a summary sheet from the original sale, a broker’s product grid, or a recollection of what the agent said in 2011. Ask the carrier, in writing, and keep the answer.
The exact questions to ask, and why the answers must be written
Call Midland National policyowner service with the policy number in hand and ask for written confirmation of five items:
- Is this contract convertible as of today?
- What is the last calendar date on which a conversion application will be accepted?
- Which permanent products may this contract be converted into as of that date?
- Is partial conversion permitted, and if so, what is the minimum amount?
- Is conversion available on an original-age basis, or attained-age only, at this point in the contract?
Verbal answers on conversion windows are unreliable across the entire industry, not because service representatives are careless but because the answer depends on the specific term series, the issue age, the state of issue, and whether an extended conversion rider was elected at application. Two policies issued the same month with the same face amount can have different deadlines.
The assumption that causes the most damage is that conversion runs to the end of the level premium period. Frequently it does not. Common industry structures close the window after a set number of policy years — ten is typical — or at an attained age in the sixties, whichever comes first. That means a 30-year level term purchased at 40 can lose convertibility at 65 while the level premium continues to 70. Since roughly 70 is where the secondary market becomes genuinely interested, the window often shuts just before the policy would have mattered. The general framework is in how a term conversion rider works; your contract is what controls.
The ‘convert into what?’ problem at an indexed-products carrier
Midland National’s permanent portfolio has long been weighted toward indexed designs — indexed universal life on the life side, fixed indexed annuities on the annuity side — distributed through independent channels. That shapes the answer to question three above, and it has a direct effect on price.
Institutional buyers value a policy by projecting the premium required to keep it in force to the insured’s projected life expectancy, then discounting the death benefit back. With a guaranteed universal life contract carrying a lifetime no-lapse guarantee, that premium is a known quantity: the contract states it, and paying it guarantees the death benefit regardless of crediting. With an indexed universal life contract, the buyer must assume future declared caps, participation rates and cost-of-insurance behavior. They assume conservatively and price a margin for the uncertainty.
The consequence is that the same insured with the same face amount can draw a materially lower bid if the only conversion target is an indexed product than if a guaranteed design is available. So when you ask for the eligible product list, ask specifically whether any option carries a lifetime or near-lifetime no-lapse guarantee, and get the guarantee premium at the insured’s attained age. If one exists, it is usually the right conversion target for a sale. Our overview of guaranteed universal life explains why buyers prefer it.
If no guaranteed option is available, that does not end the analysis — it lowers the expected offer, and you should hear that number before spending anything on the process.
| Conversion target | How a buyer models it | Effect on the offer |
|---|---|---|
| Guaranteed UL with lifetime no-lapse guarantee | Premium is contractually fixed and known | Best pricing; no assumption margin |
| Guaranteed UL with guarantee to a set age | Known premium to that age, assumption risk after | Slight discount depending on the guarantee age |
| Indexed universal life | Must assume future caps, participation and COI | Meaningful discount for assumption risk |
| Current-assumption UL | Must assume future declared crediting rates | Meaningful discount |
| Participating whole life | Fixed premium, dividends not guaranteed | Priced well but premium is often the highest |
Post-level premiums are not a strategy
Owners sometimes reason that a term policy does not truly end at the close of the level period, since most contracts allow annual renewal to a much later age. Technically true, economically irrelevant. Post-level annual renewable term rates commonly jump by a multiple of five to ten in the first renewal year and climb steeply every year after, because the carrier is pricing for the fact that only the sickest insureds choose to renew.
No institutional buyer will underwrite that premium stream. From a valuation standpoint, a term contract that is past its conversion window is treated as terminating at the end of the level period, full stop.
There is one narrow exception. If the insured has a terminal or severely impairing condition and a documented life expectancy shorter than the remaining level term, the case can be viable — but it belongs in the viatical category, is priced against the short life expectancy rather than the conversion right, and is handled under a different set of state rules. Details on how impairment drives eligibility are in health requirements for a life settlement. Outside that exception, an unconvertible term policy has essentially no market value, and a reviewer telling you otherwise is worth questioning.
Sequence the transaction so you never pay a conversion premium on speculation
Converted permanent coverage is priced at the insured’s attained age. On a $500,000 face for a 69-year-old, an annual premium of $24,000 to $40,000 is a realistic range depending on product and rate class. That is not money to spend on a hope.
The correct order is: confirm the conversion right and deadline in writing; obtain quotes for every eligible permanent product at attained age; complete life expectancy underwriting; collect and compare offers; and execute the conversion at or near closing, with the buyer funding or reimbursing the conversion cost. Converting first and then shopping puts the entire premium at your risk and is the most common avoidable loss in this market.
Consider partial conversion as well. Most provisions allow converting a portion of the face amount. A family that still needs $200,000 of protection but holds an $800,000 term can convert what it needs, keep it, and evaluate the balance separately. The side-by-side comparison in life settlement versus term conversion covers when each path wins.
Who this works for, and what to bring
A term policy is a genuine candidate when four conditions hold together: the insured is roughly 70 or older, or younger with a serious documented impairment; the face amount is $100,000 or more, and preferably $250,000 or more; the conversion window is open with enough runway to close a transaction inside it; and the family has concluded the coverage is no longer needed.
It is not a candidate when a spouse, a dependent, or a special-needs beneficiary would be left exposed — the death benefit is worth more than any bid. It is not a candidate for a healthy insured in their early sixties, whose projected life expectancy is too long to justify the conversion premium. And it is not a candidate once the conversion window has closed. Getting a clear no in those cases is worth more than an optimistic maybe.
Bring five things to a review: the policy cover page showing product name, issue date, face amount and level period; the conversion provision or rider page; Midland National’s written statement of the last conversion date and eligible products; quotes for those products at attained age; and a candid summary of the insured’s health history and treating physicians. That last item drives life expectancy underwriting, which drives valuation more than any other input. The full list is in what documents a life settlement requires.
Plan for two to four months end to end, most of it spent waiting on medical records and the carrier’s verification of coverage, and make sure that window fits inside the conversion deadline. Pine Lake Life Solutions does not purchase policies and is not licensed in every state — a free policy review reads your conversion language and tells you honestly whether pursuing this is worth your time. For the very different analysis that applies to small permanent contracts, see our Midland National burial policy guide, and for term generally, selling a term life policy.
Frequently Asked Questions
How do I find out whether my Midland National term policy is still convertible?
Contact Midland National policyowner service with the policy number and request written confirmation of the last date a conversion application will be accepted, the eligible permanent products, and whether partial conversion is allowed. Ask for it by secure message or letter. Conversion windows depend on the term series, issue age and state of issue, so a verbal answer is not reliable enough to plan around.
Does the conversion right last as long as the level premium period?
Often it does not. Industry-standard structures close conversion after a set number of policy years, commonly ten, or at an attained age in the sixties, whichever comes first. A 30-year level term can therefore stop being convertible fifteen years before the premium period ends. Confirm your own contract’s provision rather than assuming the two periods run together.
Why does it matter which permanent product I convert into?
Because it changes what a buyer will pay. A guaranteed universal life contract with a lifetime no-lapse guarantee gives the buyer a known premium to carry the policy to maturity. An indexed design forces assumptions about future caps and cost of insurance, and buyers price a conservative margin for that. Ask specifically whether a guaranteed no-lapse option is on your eligible list.
Can I renew my term policy after the level period instead of converting?
You generally can, but the premium is not economic. Post-level annual renewable term rates commonly rise fivefold to tenfold in the first renewal year and climb sharply after, because carriers price for the fact that mainly impaired insureds renew. Buyers will not underwrite that stream, so renewal does not preserve any secondary-market value in the contract.
Who pays the conversion premium if the policy is later sold?
In a properly sequenced transaction the conversion is executed at or near closing and the buyer funds or reimburses the cost, because the buyer needs the permanent contract to exist. Converting before you have offers in hand transfers the entire premium risk to you. Confirm the right, get quotes, get offers, then convert – in that order.
The agent who sold me the policy is gone. Who do I deal with now?
Midland National distributes through independent agents and marketing organizations, so agents commonly move on or retire. Deal directly with Midland National policyowner service, which holds the contract of record. A new independent agent can help you interpret the terms, but only the carrier can confirm the conversion deadline, the eligible product list and current values.
Find out what your policy is worth — free, confidential, no obligation.
A 15-minute educational review covers your eligibility, every alternative, and a realistic view of what each path would net you.
Related Reading
- What Is A Term Conversion Rider
- Sell Term Life Policy
- Life Settlement Vs Term Conversion
- What Is Guaranteed Universal Life
- What Is Indexed Universal Life
- Health Requirements For A Life Settlement
- What Documents Are Needed Life Settlement
- Sell My Midland National Final Expense Policy
Pine Lake Life Solutions does not purchase life insurance policies and does not provide legal, tax, or investment advice. Information provided is for educational purposes only. Eligibility for any option, including life settlements, is not guaranteed and depends on individual circumstances, policy terms, underwriting, and market conditions. Consult independent legal, tax, or financial professionals before making decisions regarding a life insurance policy.