A lot can happen in your life.
Whether you have a shorter 10-year term life insurance policy or a longer 30-year term. There is always the chance you may outlive your life insurance.
This means that once it expires, you will have to consider what you need in your life at the moment. Whether you need more coverage or no coverage. You will also have the choice to check whether you want another term insurance again, or you want to go for permanent life insurance.
This is an important question you should ask yourself at this point. What financial matters would you want your family and beneficiaries to have taken care of if you were to pass away?
What happens if your term life insurance expires?
When your term life insurance expires, you will lose any insurance protection in case of your passing. This would mean that your family and beneficiaries would not be able to receive any death benefit.
As mentioned before, this is a good time to revaluate the circumstances and financial needs of your family. This includes determining how much coverage you would need. Let’s dig into the details of your alternatives if your term life insurance is about to expire or has already expired.
- Extending or Renewing your Term Life Policy
When your term life insurance is expiring, you may have the opportunity to extend or renew it. This means that if you opt for this option, you will receive the same coverage and term length as your previous policy. When you are certain that you require the same level of coverage, don’t want anything permanent, and are happy with your policy, going for this option can be helpful. But it’s crucial to assess your coverage needs before you make a decision about buying or renewing a term life policy.
Also, keep in mind that if you renew your term insurance every year, your premium amount will continue to increase too. This is because you are getting older. However, you will not have to go through health questions and other sorts of inquiries for a requalification.
You should also be aware that depending on the term’s length, there may be an age restriction. And that not all insurance providers allow you to renew or extend your term life insurance coverage. So, before making up your mind about this option, you will have to check with your insurance provider and the conditions of your term insurance too.
On the other hand, some Canadian insurance companies offer this as a default setting. If you don’t take any action after the initial term ends, your term life insurance will continue to be automatically renewed each year until its final expiration date.
- Convert to a Longer-Term Policy
You can convert to a longer-term policy that is ten years longer than your original term if you decide to receive coverage for a longer period.
This choice offers affordable, extended protection for all or a portion of your original insurance. You might be able to select this option based on your age as well as the length of time you have had your insurance.
Due to your advancing age, your premiums will rise for the new term duration. But if you maintain the same level of coverage, you are not required to requalify or respond to any additional health-related inquiries.
- Make the switch to a term-100 policy
Sometimes, you just want things like your premium amount to not change with each passing year. So, if you want a fixed, non-changing premium to receive insurance for your entire life, you may get an option to convert your term policy into a term-to-100 policy when your term life is expiring.
- Change your life insurance coverage
Sometimes you might not be interested in renewing your coverage. And instead, wonder whether another type of life insurance would be a better fit for you. Understanding your options and knowing what you are searching for will help you get the best life insurance coverage. Changing term life insurance companies can make a significant impact on you too.
There are plenty of life insurance policy options that you can choose from. Instead of going for another term policy, you can go for one of these:
- Permanent life coverage
- Simplified life insurance policy
- No medical or guaranteed life insurance coverage
- Critical-illness insurance
- Disability insurance
Term life insurance, permanent life insurance, simplified life insurance, and guaranteed or no medical life insurance are the options in the Life Insurance Category.
However, if you would prefer additional insurance, you can choose from options like disability insurance and critical illness insurance in the event that you become disabled or seriously ill. These plans are frequently combined with life insurance policies to provide more coverage for various scenarios.
Furthermore, when considering a disability insurance policy, they should carefully assess their specific needs and explore the options available to ensure they find the most comprehensive coverage that suits their circumstances best, such as disability insurance Winnipeg.
If you’re interested in checking out one of these options once your current term insurance expires, speak with a life insurance agent right away to go through your alternatives.
What happens to the premiums you have already paid after your term life insurance policy expires?
Your payment for the life insurance policy’s premium is retained by the company. See, when you get a life insurance policy, the premium is supposed to be paid monthly. In case of your demise, the insurance company will then pay the beneficiary a lump sum payout in accordance with the contract.
Therefore, your beneficiary won’t get any death benefits after your life insurance policy expires or is canceled.
When should you start worrying if your term life insurance is nearing its expiry date?
Many times, people don’t take this issue seriously. They think it will be okay to renew their term life insurance whenever they want. But actually, the time you choose to renew your term life insurance can have a huge impact!
You almost always receive a notification about the expiry of your term insurance before it ends.
But it’s important to know that the date your policy becomes effective only has minimal bearing on the cost of your monthly premium. Life insurance providers will consider you to be at the age nearest to your birthday. Therefore, if you want to apply for a new policy, be aware that if your birthday was less than six months ago, you will be considered your actual age. If it is within six months, you will be deemed to be a year older and your premium will also be slightly. Even while the premium difference may not appear too much for some people at this point, it can have an impact over time.
For example, you are a 39-year-old, non-smoker, healthy male. You applied for a life insurance policy on the 15th of March 2022. Your birthday is later that month on the 20th of March. But since you applied just before your 40th birthday, even though you were 39 at that time, your insurance provider will quote according to your 40 years of age. On the other hand, if you had applied for renewal or a new policy around, say, the 15th of September 2021, you would have been considered 39 years old instead of being considered a year older. And your premium amount would also be slightly lesser then.
Most insurance agents advise that you should apply for a renewal or, in case you are buying a new policy, you should do that 6 months prior to your birthday. This way, you will be considered at your current age rather than a year older.
Conclusion:
It can be important to get life insurance. Whether you’re looking for similar coverage or a new one to protect your business, your estate, or your loved ones from financial hardship in the case of your passing. Numerous instances demonstrate that most people who own property or have debts would benefit from having a life insurance policy to protect them.
