What are the Things One Can Do When Their Term Insurance Policy Expires?

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Things You Can Do When Your Term Insurance Policy Expires

A term insurance plan provides monetary security to a family in the absence of the head earning member. But do you know what happens if a term insurance policy expires ? Let’s find out!

So, your term insurance plan is coming to an end and you are not sure what to do with the maturity amount. One option is to take the amount and close the policy. In this case you may be without life coverage for the remaining years of your life. Many people go for this option, particularly if their children are grown up and settled and they have enough savings for themselves.

But there are other options as well. So, if you want to know what to do when your term life insurance expires, read on. In this post, we are discussing the various options that a policyholder can avail  if their policy term comes to an end.

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Options a Policyholder Have if  Term Insurance Policy Comes to an End

Here are some of the things that a policyholder can do if their policy term comes to an end:

  • You can go for an extension of your current term policy – Most policies allow the insured to keep their policy active by renewing it year after year till they attain 95 years of age. These policies come with the feature of guaranteed renewability, which allow the policyholder to extend their coverage.  Under this feature, a policyholder can keep the policy going even after it reaches maturity. Further, they do not need to go through any new paperwork and medical examination. However, in this case the premium amount will be modified or increased by the insurer.
  • You can switch your term plan into a permanent plan – This is a new feature available with most policies these days called as a conversion option. This rider allows the policyholder to convert his/her term plan and make it a permanent policy. Here also, the insured is not required to go through further medical examination. However, it depends on the insurer how they prefer to handle the switch or conversion from term insurance to a permanent insurance plan. Thus, the policyholder has to go through the terms and conditions of the policy to know how the process works and what options they have. For instance, switching to a whole life policy. Also, depending on the insurance company they can allow a time frame or age limit by which such conversion is allowed during the tenure of the policy. This can be a good alternative for many people. However, they need to consider the conversion before the expiry of the policy or within the conversion deadline allowed by the insurer. Thus, in this case you must know when does your term life insurance expire.
  • You can buy a new life insurance policy – Depending on the need and the situation at the time of expiry of the policy, you may even choose to buy a new life insurance policy altogether. If you have enough savings and you do not want to invest the same amount you have just received. So, you may rather prefer to buy a new coverage than investing the maturity amount further. Also, if you have greater needs for your bigger family, you may prefer to buy another plan.

Read More: Best Term Insurance Plans in India 2022

In this case, you may like to buy a policy with short term life insurance duration rather than going for a long duration policy of 10, 15 years. You can talk to your insurer and modify the duration as per your requirement. Keeping a track of when your term life insurance expires would help in this regard to plan ahead and look for a new and effective term insurance policy.

To Conclude

As discussed above, now you know what happens to term life insurance when it expires. Also you know about the various options that can be used to extend your term plan when it matures or comes to an end. You may choose a plan that combines a permanent plan like a whole insurance policy together with a term insurance plan. This way your policy will offer greater monetary benefits along with offering extra coverage in the short duration of time of your extended policy.

Found this post informational? Browse PayBima Blogs to read interesting posts related to Health Insurance, Car Insurance, Bike Insurance, Term Life Insurance and Investment section. You can visit PayBima to Buy Insurance Online.

 

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Sep 12, 2022
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PayBima Team
PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.

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