(MONEY Magazine) – Don't just hang up the phone if your life insurance agent makes what sounds at first like a silly suggestion: trade in your low-cost term insurance policy for cash-value coverage with premiums that can cost five times as much. More and more term policyholders are doing just that -- and for some people, converting from term to cash value is not an outlandish idea at all. While term insurance is a best buy for young people, the premiums increase as you grow older. By the time you reach age 50, cash-value insurance, such as whole life, universal life and variable life, can wind up costing you less over the rest of your lifetime. With a cash-value policy, your annual premium won't go up as long as you make payments. Moreover, part of the premium is invested in a tax-deferred account that you can borrow against; term policies have no such cash buildup. One inducement for conversion: you won't have to pass a medical exam as you typically would if you were buying another company's cash-value policy. In that case, if you had a serious illness such as cancer or diabetes, you might be refused coverage. No matter what your age or health, don't convert unless you are sure you will keep the new policy for at least 10 years. Says Stephen Shaw, an independent insurance agent in Lafayette, Calif.: ''You need that much time for the cash-value account, which might yield about 8.5% a year, to exceed the policy's front-end expenses.'' Conversion does not require any additional charges, and many insurers offer financial incentives to soften the cost of the new, higher premiums. For instance, a policyholder of Federal Kemper who converts from term to universal life gets 50% off the new policy's minimum premium in the first year. For a 40-year-old nonsmoking man buying $500,000 of insurance, that's a $1,200 savings. Alternatively, Federal Kemper lets you add the premium savings to the policy's cash value. Of course, there are big payoffs for your insurer and agent if you convert. ''Insurers prefer cash-value policies to term because they receive more cash flow,'' says Joseph Belth, editor of the Insurance Forum, a respected monthly newsletter. Agents' commissions, usually half of first-year premiums, are often four or five times higher on cash-value policies than on term. So you can expect a hard sell from your agent. ''Don't be blinded by the incentives,'' warns Loren Dunton, president of the National Center for ( Financial Education, a nonprofit consumer organization in San Francisco. ''Ask yourself, do I really need this type of insurance, and would I buy this policy anyway?''