Insurance, Life Insurance

Does Life Insurance Ever Expire?

February 15, 2022

Buying life insurance is something you often do and then forget about it. Your monthly payments to the life insurance company are automated so you don’t even have to remember to make them. You and your family can rest easy knowing that if something happens to you, they’ll be protected. But what if nothing happens and you outlive your life insurance policy? While you’re happy to be alive, you may have many questions, including:

These are all great questions, and this article will answer them for you and provide information on how you can get other life insurance policies if you want.

How Term Life Insurance Works

Term life insurance is one type of life insurance product you can buy for protection. It is often the most affordable option. You’ll be covered with term life insurance for a specified amount of time. For example, you can buy term life insurance for 10 or 20 years. It’s a popular life insurance choice among younger customers who are in good health.

As the insured person, if you die before the life insurance term is reached, your beneficiaries will receive a financial benefit payment.

Benefits of Term Life Insurance Policy

Term life insurance offers you and your family peace of mind that they will still be taken care of if anything should happen to you. This is because life insurance companies will pay a specified amount of money to beneficiaries.

This is called the death benefit where you’ll be able to name beneficiaries of your policy. This money can help your loved ones cover the costs of your funeral, the mortgage, outstanding credit card debt, etc. Life insurance is an investment into the security and well-being of your loved ones should you pass away.

How Permanent Life Insurance Works

Permanent life insurance is just what it sounds like – life insurance that is permanent. In other words, you’re investing in an insurance product that will be with you for the rest of your life.

Cash Value Accumulation In Whole Life Insurance

Whole life insurance is a form of permanent life insurance. The policy provides coverage for the duration of your life. It also offers a guaranteed death benefit for your beneficiaries that won’t change.

One of the attractions to whole life insurance is that part of the premiums you pay go into a cash-value account. This cash value accumulation is like a savings plan that you or your beneficiaries can access at a later date.

What Happens To A Life Insurance Policy When It Expires?

Should your term life insurance policy expire, it’s the end of your agreement with the insurance company. You’ll stop paying premiums and the company will no longer offer your beneficiaries any death benefit should you pass away.

All of the money you’ve paid into your insurance will stay with the company. Unless you have a whole life insurance policy, you won’t get any money back from the insurance company.

What To Do When Term Life Insurance Policies Expire?

If your term life insurance policy expires before you need it, that’s good news. Term life insurance offers a sense of security for you and your loved ones, but if you never use it, you’ll have questions about what to do when your life insurance expires.

It’s possible to renew your life insurance after it expires, but the premiums will increase. This is because as you age, the risk of you needing to cash in on the policy also increases. For this reason, we recommend you consider switching insurance at an earlier date. In other words, don’t wait until your term life insurance policy expires before you buy longer-term insurance.

Here are some options you can consider when your term life insurance policy is about to expire:

1. Extend Your Current Policy

Most life insurance companies allow you to extend your life insurance annually until you are 95 years old. This means you won’t have to go through the underwriting process or take a medical exam to qualify. But remember, with this option, your insurance premiums will continue to go up each year.

2. Convert Term Life Insurance To Permanent Insurance

Most term life insurance policies have a conversion option that makes switching to a permanent policy easier. Each life insurance company has different conditions for converting your term life into a permanent life insurance policy. Talk to your insurance agent to find out the specific provisions for your life insurance.

3. Buy A New Life Insurance Policy

Depending on what stage of life you are in, you may want to change your life insurance policy. You might have a bigger family now compared to when you first bought insurance, or you have more savings.

Change happens and if your life insurance policy doesn’t meet your needs anymore, it’s best to discuss your needs with your life insurance agent. They can help you find coverage that fits your current situation.

Can I Convert My Term Life Insurance Policy To Universal Life Insurance?

It may be possible to convert your term life insurance to universal or permanent life insurance. It’s best to contact your insurance agent to find out what your options are with the insurance policy you have. However, you want to do this well before your life insurance expires, as some insurance policies allow you to convert it before the end of the term.

Why Maple Bay Should Be Your Life Insurance Broker

Whether you’re buying life insurance for the first time or you want to review your options, Maple Bay Financial should be your first call. Our brokers have extensive experience in the Canadian life insurance industry. We seek to understand your needs and situation and find the best insurance product for your peace of mind.

When you’re looking for answers about how to handle the expiration of your term life insurance, contact Maple Bay.

Matt Kakuk
February 15, 2022
8:23 am

AUTHOR

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