Learn About Your Options When a Term Life Insurance Policy Ends
What are My Options When My Term Life Insurance Coverage Expires?
If you have a term life insurance policy you may be wondering what you can do when your term runs out.
Actually, there may be a few options to choose from when your term coverage expires, including:
Renew – If you choose to renew your term policy you will not have to take a health examination, but your premium will be higher for your new coverage based on your age at time of your renewal.
Convert – You may have the option to convert your term (temporary) coverage into a permanent policy by a specific date stated ion your life insurance contract.
This must be done before your term insurance expires. Your new permanent coverage would cost much more money, but your life insurance would be guaranteed to last your entire lifetime, as long as you pay your premiums.
No Coverage – Choosing to go without any life insurance once your term policy expires may be risky.
If you decide you need life insurance later on, it may cost a lot more, or you may find you are uninsurable (unable to get insured) due to a change in your health.
Buy a New Policy – If you choose to purchase a new life insurance policy you may be required to take a medical exam to prove you are insurable.
Also, there would be a new contestability period of two years that starts with a new policy.
This means, the insurer can contest any claim made on the policy if the insured dies within the first two years of being insured.
So, if you lied on the application, and the lie is determined to be a material misrepresentation, meaning they may not have insured you had they known the truth, there may be no death benefit paid out on your new life insurance policy.
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