Generally, nothing unique happens when a term life insurance policy expires. This type of insurance is inherently temporary, so outliving your policy simply means you don’t have to continue paying your premium, your coverage ends, and the potential death benefit dissipates.
That said, other important things can happen at the conclusion of a term life insurance policy, but they don’t apply to everyone. For example, you may be able to get a refund of what you paid into term life insurance if you purchased a return-of-premium policy.
Your policy may also have a term conversion rider, which allows you to convert your term life insurance policy into a permanent life insurance policy without having to go through another medical exam. Keep in mind, however, you may need to decide whether or not to convert your policy several months before its expiration.
Can I Renew My Term Life Insurance Policy?
Yes. You can renew most term life insurance policies on an annual basis. Your coverage will probably be the same, but your premiums will rise because term life insurance becomes more expensive the older someone is.
This can be a good option if you expect your dependents are only a few years away from becoming financially independent, you only have a few months left on your mortgage, or you need to achieve another short-term financial goal.
Converting Term Life Insurance into Permanent Life Insurance
As previously mentioned, some term life insurance policies offer a term conversion rider. This provides the policyholder with the option to convert their term life insurance into permanent life insurance without requiring an additional medical exam.
You’ll pay more for a conversion policy, but this benefit can be worth its weight in gold, so to speak. This is because converting your existing term policy will probably be a much cheaper option than purchasing a new life insurance policy at the end of the term.
Not all term life insurance policies are convertible, however, so talk with an experienced insurance expert to ensure the policy you intend to buy has this feature. We at Insurance Specialists, Inc. can help in this matter, along with any other questions you may have about purchasing life insurance.
Learn more about your options today by contacting us online!