Affordable Life Insurance Protection for Your Family

Can Term Life Insurance Be Renewed?

Renewing a Term Life Insurance Policy

If you currently own a term life insurance policy you may be wondering if your policy can be renewed.

First, let’s review what renewable term insurance is and how it works.

Renewable Term Life Insurance – Is term life insurance that is renewable at the option of the insured person, who is not required to take a medical examination to renew coverage.

Regardless of physical condition, the insured must be allowed to renew the policy and the premium cannot be increased to reflect any adverse physical condition.

However, the premium of each renewal increases to reflect the Life Expectancy of the individual at that particular age.

Premiums do increase dramatically when you choose to renew your current term policy.

"YES", you may be able to renew your term insurance when your current policy term ends.

Why Renew Your Term Policy?

There are many good reasons for renewing your term coverage, including:

Extend Coverage – Your needs have changed and you need life insurance for a longer period of time.
Health Issues – You have developed health issues and want to continue your protection.
Uninsurable – You would be unable to get insured for a new life insurance policy.

Renewal Considerations:

When renewing term life coverage there are several factors to consider, including:

Cost – Renewal premiums are usually much higher than the cost of your initial term premiums.
Duration of Term – You may be able to renew coverage for a period of up to 10 years, or more.
Insurability – You will not have to prove insurability by taking a physical examination.
Examination – You may want to renew instead of buying a new policy if you would rather not take a health exam.

Date to Renew By

Your life insurance policy is a written contract which includes a section referencing the date by which you may advise the insurance carrier of your desire to renew your term life insurance coverage.

However, many term life policies are guaranteed renewable which means you will retain coverage without going through the underwriting process again.

So, when the policy renews you will get a bill for the renewal rate, which will be higher than your previous premiums.

Make sure you contact your insurance agent before your term life policy expires to advise him or her that you wish to renew your coverage.

NOTE: If you are healthy and do not have any high-risk factors in your lifestyle, you might qualify for a better rate with another insurance company.

So, you may want to compare pricing with other life insurance companies.

Make sure you get pre-qualified so you know before applying that the change in insurers would work out in your favor.

Also, don’t cancel your current term life insurance policy until the new one is "In Force". You want to avoid any gap in life insurance coverage so you aren’t uninsured for any period of time.

Is Your Term Life Insurance About to Expire?

If you have a 10, 15, 20 or 30-year level term life insurance policy nearing expiration, there are things you may want to consider.

You may have several questions about your policy:

What happens when my term expires?
Will I lose my life insurance coverage?

First, you may rest easy knowing your life insurance policy may not be expiring at all.

However, even if it is, there may be several options available for extending your term insurance policy.

The most cost effective option in some cases may be to purchase a new term life policy.

There may be instances where that option is not available.

What to Do When Your Term Life Insurance Policy Expires

Your Policy Probably Isn’t Expiring
Premiums Increase After the Initial Period
Actions to Take When Your Term is About to Expire

Your Term Life Insurance Policy Probably Isn’t Expiring

Term life insurance policies usually don’t expire after the initial guaranteed level premium period.

Many term life plans offer coverage until the insured person reaches a certain age – usually age 65, 70 or even 90 years old.

However, you may have a guaranteed level premium for the first 10, 15, 20 or 30 years you are insured by the policy.

Term Life Premiums Increase After the Initial Period

After the initial term with guaranteed premiums, your annual premium will increase each year, usually.

So, if a 25 year old man buys term to age 70 with level premiums the first 20 years, his premium will be the same the first 20 years, and will increase each year after reaching age 45.

Actions to Take When Your Term Policy is About to Expire

Replace the Term Policy with a Cheaper One

If you’re still healthy enough to qualify for a new term life insurance policy, consider doing so. Usually, a new term policy will offer premiums much lower than the premiums on a renewal term life plan.

Convert the Term Policy

Check the policy’s conversion features. You may be able to convert the term policy to a permanent policy without evidence of good health – you won’t have to take a medical exam to convert your insurance.

If your health has deteriorated since you bought your term policy, this may be a good option to consider.

Pay the Renewal Premium

If you can’t afford to convert your policy or replace it, then you might consider paying the renewal premium.

You’ll want to consider your health, life expectancy and how long you need the coverage to last.

However, if you are healthy and need coverage for several years, it may be best to purchase a new term life insurance policy.

Decrease Your Death Benefit

Many life insurance companies allow a one-time decrease in the face value of the life insurance policy. By decreasing the amount of coverage provided by your policy, you will see a decrease in the premium you pay for your coverage.

Sell Your Life Insurance Policy

If your term policy is still convertible, you may be able to convert the policy and then sell it.

This is called a "Life Settlement".

If your health has deteriorated, this could be a lucrative option for you.

Re-Heath Classification

There may be another way for you to save money on your insurance policy.

If you have lost weight, stopped smoking or reduced your cholesterol levels, you may be in much better health than when you started your current life insurance plan.

If so, most insurance carriers allow for a one-time application for a "health re-classification", in which they essentially reclassify you based on your current health which leads to an immediate reduction in your premium.

Replace Your Term Life Insurance Coverage at Affordable Rates

If you’re looking to replace your current term life policy that is about to expire you may find you will save a lot of money compared to the premiums you may pay to renew your current term insurance policy.

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