What happens when your term life insurance runs out?
When you purchase a term life insurance policy, the premiums are locked in for a set term such as 10, 15, 20, 25 or 30 years. At the end of the term, the policy will expire. You may drop the policy at any time.
At the end of the term, the policy will automatically expire. However, you will also have the option to continue the policy but at a much more expensive rate.
Most policies will allow you to convert your policy during the term to a permanent policy. This does not require any medical underwriting or questions. The permanent policy will be priced at the client’s attained age and at the original risk class from the term life policy.
There are some circumstances when someone may want to continue a term life policy. For instance, if you have a terminal illness and your term policy is about to expire, you may want to consider continuing the policy and paying the higher premium as the death benefit will be paid to your beneficiaries at the time of claim.
Recently I had a client who had a 20 year term for $2mil. She had 4 children and in the 19th year of the policy, she was diagnosed with stage 4 breast cancer. She continued the policy when the policy expired and when she died 1 year after the policy expired, her death benefit was paid fully to her husband.
It is important to continue to review your life insurance needs as well as your health circumstances before deciding to cancel your life insurance policy.
For more information about life insurance, contact Set for Life Insurance today!
