Outliving your term life insurance policy is something we all hope for, especially if you are only covered until the age of 60, 70 or so. Whilst it’s a great thing to be alive longer, 🥳 it might feel bittersweet knowing what to do next. Without life insurance, your loved ones will not receive a payout upon your death, this might leave you a bit stuck about what option to choose. 🤔 In this article, we’re going to tell you a little bit about outliving your term life insurance and what your options are.
When does my life insurance term end?
Your life insurance term is the length of time you pay monthly premiums for and are, therefore covered for. ☂️ If you’re not sure how long your life insurance term is, you should check your policy as this will have been decided by you at the time of taking it out. At Bequest, our term life insurance can cover you anywhere from 5 years to 40 years. 💛
Where does the money go?
It’s important to remember that term life insurance is not a savings or investment plan. If you outlive your term, the money you have put in through your monthly premiums will stay with the insurance company and your coverage will end.
Do I need another policy?
You have four options to choose from if your term life insurance policy is coming to an end, these are:
1. Renew the policy
If you have poor health, this is a good option. Whilst you will end up paying higher monthly premiums, you will have guaranteed cover. ☂️ The reason you will have higher monthly premiums is that you will be considered riskier, as renewing your policy means that you’re more likely to die within the term and therefore require a pay-out. 💷
2. Buy a new policy
If you still have a lot of life left in you and are in good health, this will be the best option for you. 🍏 Again, you might end up paying slightly more in monthly premiums as your health may have gotten slightly worse as you’ve gotten older. You’ll also have to reconsider how much coverage you need as you may not have the same reasons to get cover as you did for your first policy, an example of this could be now having financially independent children. 🙌
3. Get permanent life insurance
One option you might lean more towards is whole-of-life insurance. This is where you are guaranteed a pay-out because you will always pay monthly premiums however, this reason will make your monthly premiums more expensive. If you can comfortably afford the premiums, converting to whole-of-life insurance might be the best option for you.
4. Stop your life insurance
When your term life insurance comes to an end and you’re still around, it is worth asking yourself if you still actually need the cover. If you’ve managed to pay your monthly premiums comfortably over your term, you might be in a financial position where you can leave money in your will 📄 to your loved and close ones rather than relying on a pay-out upon death. ⚰️
What's your reason for getting life insurance?
It’s also worth thinking about your reason you once took out life insurance. Was it because you had a mortgage you wanted to be paid off if you were to die? 🏡 Was it to leave your loved ones with a lump sum? 💷 Did you have young children who couldn’t look after themselves once but are now grown up and financially independent? Whilst it’s always great to have cover, if you don’t have the reasons for it that you once did, and you have savings and assets to leave behind, it might make no sense to carry on paying for life insurance once your policy has come to an end. 🛑
The reason we get life insurance is to help cover our loved ones financially in case we were to pass away. Many people make sure they are covered until their dependents are no longer financially dependent on them or they have retired etc. When people are no longer dependent, there isn’t much need for cover.
When making these decisions, it’s important to think them through logically and ensure you are making the right one for you and your loved ones.
Life insurance with Bequest
Taking out life insurance is one of the best ways to protect your family and dependents in the case of your death. By writing a will with Bequest, you will have a stress-free and simple writing process with help along the way. Get the cover you need today, no time for hesitation! If you have any questions, speak to us on our website or drop us an email at firstname.lastname@example.org. We’re always here and love talking about all things life insurance. 💛