There are several good reasons to buy a term life insurance policy. Perhaps you were once a young provider looking to give your family security. Maybe you had a mortgage or other payment that you wanted covered in the event of your unlikely death. Regardless of the original reason for purchasing term life insurance, the lucky among us will eventually outlive them. Your term is up; now what?
When you outlive your term life insurance, you will likely have four basic options: renew it, convert it to a whole life policy, choose a different policy, or simply let your coverage expire. Understanding your needs and your available options is key to making the right decisions.
Do You Still Need Life Insurance?
Term life insurance is particularly popular among people with a young family. These policies are often the most cost-effective way to ensure that there will be funds available to your family should something tragic happen to one of your wage earners. Most people assume that they will have fewer obligations at the end of their term.
In reality, this is not always the case. Many middle-aged and even elderly people still have bills, debts, and other expenses that their savings would not cover. It is important to be realistic about what the financial picture would look like if you or your spouse died tomorrow. Many people commonly buy life insurance for seniors for this reason.
If your survivors would be financially stable if you suddenly left the picture, you may not need life insurance. However, keep in mind that end-of-life expenses, medical bills, burial expenses, and other bills will take a chunk of your savings. You cannot buy life insurance at an affordable rate after being diagnosed with an expensive and terminal disease. This is your chance to make plans.
Is It Time for an Entirely New Policy?
You may need insurance, but that does not mean you are stuck with the same policy. You can shop around in the months before your policy ends to find a better deal. There are certain groups of people who can benefit immensely by policy-shopping. These include:
- People who did not shop around initially and have a premium that is simply not competitive
- Those who are in as good or better health now than they were years ago
- Customers who do not have any pre-existing health conditions or other factors that will drive up the cost of a new policy, like would be the case with term life insurance for smokers
These factors are not as far-fetched as they sound. Many people are still thriving when their first term life insurance policy ends. However, if this is not the case for you or your loved one, you may want to renew or convert your current policy.
Converting from Term to Whole Life Insurance
Most term policies will allow customers to convert to long-term insurance, usually in the form of a guaranteed universal life policy. This is the best option for people who have conditions or other factors that will make a new term policy financially prohibitive. After all, some of us are not in the fighting shape we were in twenty or more years ago.
Converting a term policy is particularly attractive for people who now have serious or even life-threatening health problems. It may be the only option for this group to get the life insurance benefits they need. However, you have to act fast to make this conversion. It has to be completed before your term policy ends. In addition, some companies will only allow you to convert policies if you are under a certain age. You may need to call the company to discuss the particulars of your policy, because these details are often buried in fine print. It is possible to get no exam term life insurance policies, but keep in mind they will probably be more expensive.
If you are interested in this option, get the ball rolling today. Keep in mind that your new insurance policy - and its cost - will be permanent. Make sure you choose an option that will be affordable both now and in the future.
Will My Policy Simply Expire and Disappear?
There is a last detail that catches many people by surprise: term life policies do not simply go away when the term ends. You will continue to be billed, but the premium will usually be much higher. In addition, once the policy expires, you cannot simply renew or convert it at a reasonable price. In order to keep your options open, you should begin planning around six months before the term ends.
Most people buy insurance hoping that they will never have to use it. When you outlive your term life insurance, you have officially become one of the lucky ones. Choosing a new option is the first step to planning for healthy and happy decades to come. Get started finding the right policy with us today.