Choosing a policy can raise questions about renewing term life insurance.
What is the next step once a term life insurance policy expires? Is there an optimal time to switch from term to permanent life insurance?
Policies may be able to renew automatically, depending on your age, medical condition and financial circumstance. The premiums are usually maintained at a fixed rate for the period of time until the renewal period. Insurance companies may also request an annual health review, so you should consult your insurance company on whether it’s required. Visit this page for more information about renewable term insurance.
Should you keep renewable term life insurance forever?
However, as you age, using annual renewable term life insurance can become more expensive. Some people consider making the change from term to permanent life insurance–either whole or universal—in order to cut that cost. When signing up for a term life insurance policy, you should check whether the company requires evidence of insurability for renewal. If they don’t, you may not have to undergo underwriting once again on the policy.
How riders may help:
Another option to consider would be to add a Renewal Provision or a Guaranteed Insurability Rider to the policy when you purchase it. The rider may guarantee a renewal period at the end of the term life insurance’s term. However, some of these riders are often tied to age requirements or may ask for further proof of insurability later on. Make sure to check with your life insurance provider about the different causes and stipulations of the Renewal Provision riders.
In short, renewing term life insurance should be completed as early as possible, especially as you age. The older you are, the more expensive renewal could be. You could also investigate switching from term to whole or universal life insurance as another option.
Whatever option you choose, you should own life insurance to protect the financial security of your beneficiaries. Do not leave your beneficiaries without the money they may need; purchase a life insurance policy to help ensure they do.
For more information about renewing life insurance, please read “What are Need Life Insurance Riders?”.