What Happens When a Term Life Insurance Policy Matures
Option #1 to Continue Coverage: Annual Renewals
Most term policies have an option to continue coverage on an annual renewable basis. The insurance company will not automatically select this option for you – you’d have to contact them, ask about your policy’s specific options, get a price for that renewal, and decide if you want to accept it.
A one-year renewal can work in a pinch, if you still have financial obligations you need to cover. However, it’s not an ideal solution for the long term. That’s because every time you renew a policy, the insurance company is going to increase your rate. You won’t have to take another medical exam, but they are going to look at your age and adjust your premium accordingly. And if you had, say, a 30-year term, you’re quite a bit older now than you were when you bought your policy.
As a result, you can expect annual renewal payments to be significantly higher than your original payments. If you know your needs only call for another year or two of coverage, this option can work – but we also suggest you price a brand-new term policy for, say, five years. If you’re in good health, it may actually be cheaper to start with a new policy.
Want to talk about what happens when a term life insurance policy matures? Call us at (800) 521-7873 for customized advice, or click the button below to get a free quote for a new term life policy.
