Reduce this to one date and one list. The date is the last day a conversion application will be accepted on your contract. The list is the permanent products it can be converted into on that date, with the guaranteed premium for each at the insured’s current age. Nothing else about a term policy matters to a buyer, because term coverage that cannot become permanent will expire while the insured is alive and will never pay a claim.
With National Life Group there is a wrinkle in the second half. The group is a marketing name covering two separate insurers domiciled in two states, and the permanent products available for conversion are the issuing company’s products. Which company wrote your term policy therefore determines what you can convert into — and what you can convert into determines what a buyer will pay for the result.
There is also a channel issue specific to this organization. A large share of its distribution has run through the public school and 403(b) market, where term coverage was often sold alongside retirement products by an agent on a district’s approved vendor list. Fifteen years later that agent is frequently unreachable, and the carrier is the only reliable source for the terms of the contract.
In This Article
- Which company issued the policy, and why it changes the menu
- Ask for the deadline in writing, and do not assume it tracks the level period
- Original-age versus attained-age conversion
- Converting into an indexed product costs you at the bid
- Renewal after the level period preserves nothing
- Sequencing, partial conversion, and who this works for
- Frequently Asked Questions
Which company issued the policy, and why it changes the menu
National Life Insurance Company was chartered by an act of the Vermont legislature in 1848 and is headquartered in Montpelier, Vermont. Its domiciliary regulator is the Vermont Department of Financial Regulation, the agency that supervises insurance, banking and securities in that state.
Life Insurance Company of the Southwest, generally abbreviated LSW, is domiciled in Texas with offices in Addison, supervised by the Texas Department of Insurance. It joined the National Life organization in the 1990s and became the group’s principal writer of indexed products. The organization reorganized under a mutual holding company structure in 1998.
A conversion provision entitles the owner to exchange the term contract for a permanent policy from the issuing company’s portfolio, without new medical underwriting. That means an LSW term policy converts into LSW permanent products, and a National Life term policy converts into National Life permanent products. They are not interchangeable, and a broker’s general product grid will not tell you which applies to you.
Read page one of the policy and your most recent premium notice for the issuing company’s full legal name, then address every request to that entity. Getting this wrong is the most common reason conversion inquiries in this family go unanswered for weeks.
Ask for the deadline in writing, and do not assume it tracks the level period
Request written answers to five questions from the issuing company: is the contract convertible today; what is the last calendar date a conversion application will be accepted; which permanent products may it be converted into as of that date; is partial conversion permitted and at what minimum; and is conversion available on an original-age basis or attained-age only at this point.
Verbal answers are unreliable here across the entire industry. Conversion windows depend on the term series, the issue age, the state of issue, and any extended conversion provision elected at application, and two policies issued the same month can have different deadlines.
The assumption that costs the most is that conversion runs as long as the level premium does. 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 arrives first. A 30-year level term bought at 40 can therefore stop being convertible at 65 while premiums stay level to 70. Because the secondary market becomes genuinely interested around age 70, the conversion right frequently closes just before the policy would have become valuable. The framework is in how a term conversion rider works; only your contract and the carrier’s written confirmation are authoritative.
Original-age versus attained-age conversion
Many conversion provisions offer two methods during an early window, then only one afterward. The distinction is worth real money and is almost never explained at the point of sale.
Attained-age conversion prices the new permanent policy at the insured’s current age using current rates. It is the standard method and requires no lump-sum payment. It is also the more expensive method going forward, since permanent premiums at 68 are far higher than at 45.
Original-age conversion prices the permanent policy as though it had been issued at the original issue age, which produces a much lower ongoing premium — but requires paying the difference between the term premiums actually paid and the permanent premiums that would have been paid since issue, usually with interest. That catch-up amount can be large, which is why the option is typically limited to the first several policy years.
For someone weighing a sale, the practical point is narrow but useful: if you are still inside an original-age window, ask for both quotes. A lower ongoing premium on the converted policy directly increases what a buyer can pay, because buyers subtract the projected premium stream from the discounted death benefit. The pricing mechanics are set out in how buyers price a policy.
| Conversion method | How the premium is set | What it costs up front | Effect on a buyer’s offer |
|---|---|---|---|
| Attained age | Current age, current rates | Nothing beyond the new premium | Higher ongoing premium reduces the offer |
| Original age | As if issued at the original age | Catch-up of past premium differences, often with interest | Lower ongoing premium can raise the offer |
| Partial conversion | Applies to the converted portion only | Premium on the converted amount | Lets a family keep coverage and evaluate the rest |
| No conversion available | Not applicable | Not applicable | Essentially no secondary-market value |
Converting into an indexed product costs you at the bid
The National Life organization’s permanent portfolio is weighted toward indexed universal life. That is relevant because of how buyers model a policy.
An institutional buyer projects the premium required to keep the contract in force to the insured’s projected life expectancy, then discounts the death benefit back at a required return. With an indexed contract, the required premium is not a fixed number — it depends on future declared caps, participation rates and a cost of insurance charge that climbs with attained age, none of which the buyer controls. They assume conservatively and build in a margin, and that margin comes out of your offer. Background on the mechanics is in indexed universal life explained.
The mitigating feature to ask about by name is a secondary or no-lapse guarantee. Many flexible-premium designs offer a rider under which paying a specified guarantee premium keeps the death benefit in force regardless of account performance. If a conversion option carries one, get the guarantee premium at attained age — that number is what a buyer will underwrite, and it converts an uncertain projection into a fixed one. See what a no-lapse guarantee is.
So the question to put in writing is not simply "what can I convert into." It is: for each eligible product, what premium guarantees the death benefit to age 100 or later regardless of crediting, and is that guarantee contractual.
Renewal after the level period preserves nothing
Term contracts generally allow annual renewal past the level period, which leads some owners to conclude the coverage never truly ends. Economically it does. Post-level annual renewable term rates commonly rise by a factor of five to ten in the first renewal year and climb steeply after, because carriers price for the fact that healthy insureds shop elsewhere and mainly impaired lives renew.
No institutional buyer underwrites that premium stream. For valuation purposes a policy past its conversion window is treated as terminating at the end of the level period, and the answer on sellability is no.
The one exception is a terminal or severely impaired insured whose documented life expectancy is shorter than the remaining level term. That case is priced against the short life expectancy rather than a conversion right and is handled under viatical rules, which differ by state. Outside it, hearing a clear no early saves months.
Sequencing, partial conversion, and who this works for
Converted permanent coverage at attained age is expensive — on a $500,000 face for a 69-year-old, annual premiums of $22,000 to $40,000 are realistic depending on product and rate class. Never commit that on speculation.
Run it in this order: confirm the issuing company; confirm the conversion deadline and eligible products in writing; obtain guarantee premiums at attained age for each option; complete life expectancy underwriting; collect and compare offers from more than one buyer; and execute the conversion at or near closing with the buyer funding or reimbursing the conversion cost. Converting first and shopping afterward puts every dollar at your risk.
Price partial conversion as well. Most provisions permit converting part of the face amount subject to a minimum, which lets a household keep the protection it still needs and evaluate the balance separately — frequently a better outcome than treating the choice as all or nothing. The comparison is in life settlement versus term conversion.
Four conditions have to hold together for a transaction to make sense: 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 right is open with enough runway; and the family has genuinely concluded the coverage is no longer needed. When a spouse, dependent or special-needs beneficiary still relies on the benefit, keep it. When the insured is healthy and in their early sixties, the projected life expectancy is too long to justify the conversion premium — diary the deadline and revisit only if health changes materially.
Bring six things to a review: the policy cover page with issuing company, product name, issue date, face amount and level period; the conversion provision; the carrier’s written last-conversion date and eligible product list; guarantee premiums at attained age; the original rate class; and a candid health summary naming treating physicians. The full list is in what documents a life settlement requires, and general eligibility in can a term policy be sold. Plan for two to four months end to end, and make sure that fits inside the deadline.
Pine Lake Life Solutions does not purchase policies and is not licensed in every state. A free policy review reads your conversion language against the correct company’s current product menu and gives you a straight answer. For small permanent contracts, which follow a different analysis, see our National Life Group burial policy guide.
Frequently Asked Questions
Which company issued my National Life Group term policy?
One of two. National Life Insurance Company is domiciled in Vermont, chartered by the state legislature in 1848 and headquartered in Montpelier, and supervised by the Vermont Department of Financial Regulation. Life Insurance Company of the Southwest is domiciled in Texas with offices in Addison, supervised by the Texas Department of Insurance. Page one of the policy and your premium notice identify which.
Why does the issuing company matter for conversion?
Because a conversion provision entitles you to exchange the term contract for a permanent policy from that company’s portfolio. An LSW term policy converts into LSW permanent products; a National Life term policy converts into National Life products. The two menus differ, and what you can convert into affects both your ongoing premium and what a buyer will pay for the converted contract.
What is original-age conversion and is it worth it?
It prices the new permanent policy as though issued at your original age, producing a much lower ongoing premium, but requires paying the difference between term premiums actually paid and permanent premiums that would have been paid since issue, usually with interest. It is typically available only in early policy years. If you are still inside that window, get both quotes, because a lower ongoing premium increases what a buyer can pay.
Does converting into an indexed universal life policy hurt my offer?
Generally yes, unless a guarantee applies. Buyers must assume future declared caps, participation rates and rising cost-of-insurance charges on an indexed contract, and they assume conservatively. Ask whether any eligible conversion product carries a secondary or no-lapse guarantee, and get the guarantee premium at attained age – a contractual guarantee converts an uncertain projection into a fixed cost buyers can price.
The agent who sold me this policy is long gone. Who do I contact?
Deal directly with the issuing company’s policyowner service. Much of this organization’s distribution ran through the school-employee and 403(b) channel, where agents commonly move or leave the business. A new licensed agent can help interpret terms, but only the carrier can confirm the last conversion date, the eligible product list, and premiums at attained age.
How long does the whole process take if I proceed?
Two to four months end to end is typical. Medical records retrieval commonly runs three to six weeks, independent life expectancy reports add two to three weeks, and offers, negotiation, closing and the state rescission period add several more. The entire timeline has to complete while the conversion right is still exercisable, so a deadline inside ninety days should be treated as urgent.
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Related Reading
- What Is A Term Conversion Rider
- Can I Sell A Term Life Insurance Policy
- What Is Indexed Universal Life
- What Is A No Lapse Guarantee
- Life Settlement Vs Term Conversion
- How Life Settlement Buyers Price A Policy
- What Documents Are Needed Life Settlement
- Sell My National Life Group 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.