Affordable Life Insurance Protection for Your Family
Options at Expiration of a Term Life Policy
If you are shopping for a term life policy or already own term life insurance coverage, you may be wondering What Happens When My Term Life Insurance Policy Expires?
It’s a very important question, and the answer should help you better understand the options available to you when the time comes. Better to be prepared and plan ahead.
When Does Term Life Insurance Expire?
A term insurance policy ends at the end of the policy term you choose when you take out your coverage.
Your coverage term starting date and expiration date are stated on the declaration page of your life insurance policy.
Policy Expiration Example:
If you purchase a 15-year term life policy, that starts coverage at 12:01 am on December 1, 2015 – then the coverage will end at 12:01 am on December 1, 2030.
Make sure to review your insurance contract (policy) for your exact expiration of coverage and ask your insurance agent, broker or insurance carrier about any questions you have regarding when your coverage ends.
What to Do When Your Term Life Insurance Expires
What are My Options When My Term Life Insurance Coverage Runs Out?
Your Options at Expiration of Your Term Policy
You’ll have at least a few options available to you when the time comes for your term coverage to end.
However, make sure you keep in mind the chance that your health may change over time, and you may become uninsurable before your current term insurance plan expires.
So, purchasing a new policy down the road at expiration may be costly, if you are able to qualify for new life insurance at that time.
Life Insurance Policy Dates
The dates regarding your life insurance coverage are very important to the coverage provided by your policy.
The critical dates in a policy are Issue Date, Policy Date and Effective Date of coverage. The insurance carriers have their own definitions of these terms.
However, the generally understood meaning of these terms include the following:
The policy date is important is important because so many time periods under the policy start with it:
The suicide and contestable periods, due dates of renewal premiums, expiration date of grace periods, availability and amount of non-forfeiture values and the duration of any extended term insurance.
The effective date is significant because it is the date on which the insurance company becomes liable under the contract. Insurance companies usually try to make the effective date very clear on their policies and define it in the policy and the application.
The date on which a policy first takes effect is determined by several factors, such as whether a premium was paid with the application and if a conditional receipt was given for the premium if a premium was paid.
Almost all applications read that coverage is not effective until the policy is delivered and the first premium is paid. Therefore, these criteria must be met before the policy is considered to be in place.
Backdating a policy usually results in different issue and effective dates. In that circumstance, premium due dates are ordinarily computed from the date of issue, while contestable and suicide periods run from the effective date.
The effective date under a conditional receipt depends on the language of the receipt and state law.
Keep in mind, there are policy definitional issues, state law issues and judicial interpretations that may apply to the dates stated in your life insurance policy and how coverage is applied.
Reviewing Your Life Insurance Declarations Page
The first few pages of a life insurance policy are basically a summary of the coverage and details of the insured. In most policies, the first page states the name of the insurance company, the type of plan you are purchasing, the name of the insured, the policy owner and the "free-look" period terms.
Life insurance policies have a trial period, often referred to as the "free-look period" or "right to return", which gives the policy holder a certain number of days – generally 10 to 30 days – to cancel the policy without penalty.
After the cover page is the schedule of benefits, also called the declarations page. There may be additional information included, and the schedule of benefits can be multiple pages.
Personal Information in Your Life Insurance Policy
Term Life Insurance Quotes
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