What To Do If You Outlive Your Term Life Insurance Policy
Here is what to expect and what steps to take if you outlive your term life insurance quote. When you purchase your life insurance at a young age, there is a possibility that you will outlive your term life insurance. It’s probably been a pretty inexpensive way to have peace of mind, so how can you continue that after the policy is over? We have made it easy for you to find out what term life insurance is, how long your policy is good for, and what to do if you are still alive after your policy expires. Insurance can be a confusing maze for young adults trying to keep their families protected. Still, it is essential to make sure your loved ones are financially taken care of if an unfortunate event happens.
What is Term Life Insurance?
Term life insurance provides the policyholder with coverage for a set period, usually anywhere from 5 to 30 years. Sometimes the policy is set to end at a certain age, such as 65 years old, instead of a set time. If you die before the term is terminated, your beneficiary will receive a payout from the insurance company. The upside to term life insurance over whole life insurance is that it is typically much cheaper and more straightforward. It is important to deeply consider how much coverage you need, how much you can afford, and how long you want to be covered. If you outlive your term life insurance, there are a few options that you have.
What Do You Do If You Outlive Your Policy?
When you outlive your term life insurance policy, you will no longer have the coverage. This coverage will be terminated at the end date if you are still living, which means you may have to find a new way to stay covered in case of an emergency. After the policy is up, some will make the decision to take the risk of having no life insurance.
How do you know if you no longer need this insurance? If you do not have any loved ones who rely on your financial support, have sufficient funds to cover your end-of-life costs, or have no large debts in your name. If you still need coverage, you can purchase a new term policy or convert it to a permanent policy. Below are a few ways to go about finding further coverage for yourself.
Convert to permanent life insurance
Most term life insurance policies will automatically come with a built-in term conversion rider. This built-in conversion rider gives you the ability to convert your policy to a permanent policy when the end date comes up. The most significant advantage of taking this route is that you do not have to go through the underwriting process again, which means no additional medical exams. Even if your health has worsened since you received your policy, you will remain in the same health class. You’ll also avoid the higher term premiums for older applicants!
Purchase a new term life insurance policy
If you’re still young and in good health, a brand new policy could be the route for you. If you purchase a new term life insurance policy while under 70 years old, it will probably cost less than converting to a permanent life insurance policy. Buying a new policy does mean that you have to take a medical exam, but it should be no problem if you are still in good health. You’ll also have the opportunity to reevaluate how much protection you will need. Things will change after you have had your policy for 10-30 years, so there also may be changes to the amount of protection you are looking for in your policy.
Drop life insurance altogether
As mentioned previously, another option is to drop your life insurance policy altogether. If you have enough money, no debts, and no one you are taking care of financially, this could be an option. Although some people are financially comfortable enough to let their policy go, it is always recommended to keep your policy or buy a new one.
Purchasing life insurance as young as possible is always extremely beneficial. You never know what could happen, and if you have debts or loved ones relying on your financially, you do not want to leave them with your burdens. When you outlive your term life insurance policy, there are many different options that you can choose from when searching for a new option. Fabric offers term life insurance policies, wills, and tools to organize your family’s finances online or on their app. Receive a term life insurance plan that’s right for you by applying in as little as 10 minutes!
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