Today, in times of uncertainty, life insurance has become a necessity for all. It allows you to secure your family’s financial future against unforeseen circumstances.
Although there are different types of life insurance policies available in the market, term insurance remains the most popular one.
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As the name suggests, a term life insurance plan provides coverage for a specific period. When you buy term insurance, you must pay the premium to the insurance company, and in turn, they agree to pay the death benefit to your family member (appointed nominee) in the event of your demise during the policy period.
You must know that in term insurance, you don’t get any survival or maturity benefit. This means if you outlive the policy term, then you will not get any returns from the insurance company.
With many insurance companies offering online services, buying a term life insurance policy is easy. However, many first-time insurance buyers do not know if they can extend their policy’s term. So, in this write-up, we will address this issue.
Is it possible to extend the term life insurance policy’s tenure?
Yes, you can extend the term life insurance policy’s tenure. Typically, term insurance is a long-term policy, and it provides coverage for 20-30 years, i.e., until you reach 60-70 years. When the policy matures, if you want to renew it or extend the tenure, then you can do so. However, you must know that the insurer will increase the premium based on your age at the time of renewal, and you must pay the adjusted premium.
When should you extend the term life insurance policy’s tenure?
Extending a term life insurance policy’s tenure makes perfect sense under the following circumstances:
A. If you need insurance coverage for a short period, i.e., 3-4 years after your original policy term ends, then you can extend its tenure by paying the adjusted premium.
B. If you are over 60 years when your term insurance policy matures, then you may not be eligible to purchase a new policy. In such a situation, it is better to extend the tenure of your existing policy and get insurance coverage.
If you are not comfortable with paying a higher premium, then you can still extend the term life insurance policy’s tenure in the following ways:
C. Convert your term insurance to a regular life insurance plan
This is one of the best ways to extend your term insurance plan’s tenure without paying the adjusted premium. However, you can convert your policy only if you have a convertible policy. Your term insurance may have a clause that allows you to convert the policy after a specific period.
D. Auto-renewal of a term insurance policy
If you have purchased a term insurance renewable plan, then you can extend its period at the end of its original term. In this case, the insurer will automatically extend the tenure by a pre-decided period mentioned or until you attain a specific age as per policy terms and conditions.
One of the significant benefits of buying a renewable term plan is that you can extend it even if you are diagnosed with any critical illness during the policy period. However, you may have to pay a higher premium after you are diagnosed with an illness.
Final Word
So, it is clear that you can renew or extend the term insurance policy tenure. It is best advised to purchase a term plan with the longest term so that you get protection even during your old age. However, make sure that the premium is affordable and fits your budget.
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