Let’s assume you’re still alive.
Here are your steps:
Decide whether you need life insurance towards the end of your term life insurance policy
If yes, extend your existing coverage or change your policy or convert your policy or renew your policy
If no, you’re probably making too much gosh darn money to care—even then you may want to double-check your math
Hopefully that works as a synopsis. Let’s run through what each of those options entails.
Deciding whether you need life insurance at the end of a term life insurance policy
So your policy is coming to a close and it’s time to reevaluate. The process isn’t all too different from when you first purchased your policy: consider your responsibilities, financial security, estate holdings, and determine the coverage you’ll need based on those factors.
If you’re coming to the end of a term life insurance policy, odds are your investments have seen some significant changes. Your dependents may also be less dependent, meaning your needs are likely different from the last time you chose a policy.
You can go about this however you prefer, but don’t forget you’ve got us hanging in the wing, waiting to help you choose a balanced plan that that’ll do just what you expect.
It might seem sucky that you didn’t get anything back from your policy (unless you had a “return of premium” policy). Bear in mind that had your dependents needed it, it was there. Instead, you’re still here! Hopefully that’s a better end to your policy for everyone involved.
Takeaways:
Reevaluate your needs and responsibilities
Speak to a consultant to decide on the best course of action
Be happy you’re alive! Not sad about the lack of a payout.
Deciding to renew, apply anew, or convert
Decisions, decisions… but never fear! The right path is likely clear as day, it’s finding the path that can be a bit tricky. We’re your pathfinders—just get in touch to skip this part altogether.
Letting your term life insurance policy automatically renew
What happens here is your coverage continues as long as you pay an increased premium. This might be a good way to go if you only need coverage for another year or two. The downside (and it’s a doozie) is that your coverage is going to cost a heck of a lot more (2 to 6 times more depending on the carrier).
Odds are you’re better off changing, converting, or renewing your policy.
Applying for a new term life insurance policy
Let’s say you bought a short term life insurance policy at a young age. Now you’re a little bit older, still super healthy and still like the idea of affordable term life insurance to cover things like a mortgage. What should you do??
Start fresh. Change to a new term life insurance policy that meets your updated needs. A new application is required but it’s worth it to avoid the costly renewal premiums.
Converting your term life insurance policy
This is the best option for most people. Your term life insurance was great and all, but as you’re getting older you should really consider converting to a permanent option. Likely your life insurance need is reduced and a smaller permanent plan may complement your more mature financial situation.
Permanent life insurance policies have a bunch of benefits. You often get a tax-preferred cash value and death benefit growth. You’re essentially guaranteed a payout (unless eternal life is discovered, who knows) and you can draw from the cash value later in life.
Deciding which plan to convert to can be a bit tricky—let us help you with that part.
Renewing your term life insurance policy
This is a cheaper option and it makes sense depending on your financial health. You must still be of good health, but outside of that condition, there isn’t too much else to consider.
If you’re on a budget, renewing your term life insurance policy is a good way to go.
That’s it, that’s all
There you have it. It might seem daunting as the deadline approaches to pick an option, but really it’s not that scary. It all comes down to where you’re at in life, and where your dependents are in theirs. If you’re unsure, that’s why you’ve got us.