A term insurance policy is a simple insurance policy that protects your family financially in the event of your untimely death. Term insurance is often purchased for a set period of time, although the term can be extended under certain conditions. Continue reading to find out how.
Term insurance is a life insurance policy that is purchased for a set length of time, which implies you are only covered during that time period. If you die before the end of the policy term due to an early or sad death, the insurance company will pay your designated nominee the death benefit as the sum guaranteed, which is pre-determined when you purchase the policy. However, if you outlast the insurance period, the policy normally ends and you do not get any returns or payment.
So, if you own a term insurance policy, you may have asked if you might extend the policy term. The phrase cannot be changed; it is fixed. However, under specific conditions, the term insurance duration can be modified (either raised or lowered). Among these conditions are:
If you fail to pay your Term Insurance payment and do not have a premium waiver rider, you will face the following consequences:
If you fail to pay your term insurance premiums on time, the policy will be immediately cancelled and your coverage would lapse. The only exception is if you own a premium waiver rider. In this instance, even if you are unable to pay the premium due to a loss of income or another cause, the policy will remain in force until the conclusion of the real policy term.
If you switch your term insurance policy to a life insurance policy:
Converting your term plan into a life plan is one of the greatest methods to obtain an extended term insurance coverage. However, this is only valid if you have a convertible term plan with a conversion provision in the policy paperwork. In addition, you may only change your term insurance policy into a life insurance policy after a certain amount of time, as specified in the policy agreement.
Concerning the term plan’s auto-renewal:
This is another situation in which you can extend your term insurance policy. If you purchased a renewable term plan, the insurance company will extend the coverage by another term until you reach a certain age. The nicest part about renewable term plans is that you may request an extension even if you have a medical problem. However, you should be aware that the premium amount will alter if the policy is extended; you may be required to pay a greater premium than the original premium paid during the initial term.
All term policies continue after the term ends:
People have a prevalent misconception that all term insurance plans are the same. However, each plan has its own set of terms and restrictions. You must carefully study the conditions of the policy paper before signing the insurance contract. The majority of term insurance policies do not expire at the end of the term. Most term insurance policies cover people up to the age of 95.
Unless otherwise indicated in the policy contract, when the term life policy expires, the term is usually renewed with a growing premium. As specified in the contract, the premium amount increases either yearly or at the conclusion of the term.
So, if you want to get a new term insurance policy or renew an existing one, you must examine the plans of several insurance companies and pick the best insurer to meet your demands.