Unfortunately, many people don’t read the fine print when they sign up for a term life insurance policy. Their main focus tends to be on the lower premiums, and while these policies are great for people who only need certain surety, they have drawbacks that make them less than ideal for everyone. Here’s everything to know about term life insurance and what happens when you don’t die before the policy expires:
As the name suggests, term life insurance isn’t a permanent form of insurance and only lasts for a specific number of years. Most people acquire it to prevent any issues due to premature death. A 40-year-old person might get a 20-year term policy hoping that by the time their policy ends, their children will be self-sufficient and capable of handling their matters.
Term insurance is cheaper than permanent insurance while providing a decent death benefit. But the insurance policy ends after the policy duration is over. Another issue is that getting the best life insurance is much harder as you age.
No, you don’t get any money back after your term insurance ends. Regardless of whether you used your coverage or not, it was only valid for that particular period.
If your term life insurance isn’t sufficient and you feel that you need another policy, it’s recommended that you start making plans a year before the policy finishes. These are some steps that you can consider:
While not every term policy has this feature, many term insurance policies from reliable life insurance companies have provisions that allow you to extend your insurance. Be aware that the premiums upon extension will be much different. Depending on your age and other aspects, the newer premiums can be significantly higher. In some cases, the extended policies can have increasing premiums each year.
Similarly, some policies provide you with the option of converting your term insurance into a whole life insurance policy. This policy is not limited to a specific number of years. Similar to coverage extension, you will have to pay a higher premium. There can be different terms and conditions from your policy provider for the age limit for conversion, along with cheaper policies with lower premiums and smaller payouts.
As previously stated, it can be hard to get an insurance policy as you’re older. But this doesn’t mean that everyone will turn you away. Generally, policies are available for people up to 80. In most cases, policies under $50,000 don’t require you to undergo a medical exam. It’s recommended that you work with reliable life insurance companies to guide you on your case if you’re older.
Many seniors have trouble getting a larger life insurance policy because of medical conditions. It’s recommended that they acquire multiple smaller policies and combine them. Generally, you can opt for various policies that don’t warrant a physical exam. Many people tend to go with group life insurance programs that are available through various organizations, clubs, and even employers if they’re still employed.
A final expense policy is another viable option. While they do provide rather modest payouts, these are whole-life policies that have reasonable premiums. They don’t require you to go through an extensive medical exam. Final expense policies are great for ensuring that your beneficiaries are taken care of after your passing and allow them to deal with various financial requirements that might await them.
It can be fairly troubling once your term-life insurance is about to run, especially as many insurance businesses don’t provide you with great options or any options at all. Make sure that you’re working with an insurance company that has your best interest at heart and provides you with the best options. Contact a life insurance agency with whole life insurance and final expense coverage. Get in touch with us at Franklin Life & Annuity right away. If you need life insurance for the entire family or require final expense insurance, our services can assist you.