Fifth Term

What do I do when my term period is finished?

When trying to decide which term period is right for you it is important to know your options. You can always apply for a new term insurance policy after your term is through. At the end of your policy, the insurance company will contact you to tell you that the policy is about to expire. At this point you have three options.

  • 1
    New Policy Depending on your age and health, you can apply for a brand new policy with either your existing company or a new company. The new policy will simply replace the former policy. You must be careful when doing this because new underwriting requirements must be met with a new policy. Be sure to keep your old policy in force until you know the outcome of your new application. If your health has deteriorated you might face extremely high premiums, or even worse you might be refused coverage.
  • 2
    Keep your existing policy If you know your health is bad, you can continue paying on the existing policy after it expires. It will automatically continue as an extension of your existing policy. The good part about continuing a policy is that you will not need to provide medical evidence of your insurability: renewal is automatic regardless of changes in your health of personal situation. The downfall with this option is that the policy typically becomes annually renewable. This means that each year after the guaranteed term period has finished, the premiums will begin to increase substantially every year.
  • 3
    Convert to a Permanent Policy
    You can convert your policy to a Permanent Life Insurance policy and lock in your premiums at a higher level for the rest of your life. You have the right to convert an individual term insurance policy or rider to a plan of permanent insurance without evidence of insurability. The conversion of a Term Life policy may take place at any time before the policy anniversary nearest your 71st birthday. Of course, the premiums will depend on the type and amount of coverage chosen but, regardless of health, you cannot be turned down for coverage under this conversion option.