Today, in times of uncertainty, buying life insurance is not an option. It has become a necessity for all. A life insurance policy allows you to secure your family’s financial future even when you are not around. While there are different life insurance policies, one of the most popular types is Term Insurance.
Term insurance, as the name suggests, provides coverage against death for a limited period or term. In term insurance, the insurance company pays the death benefit to the family members in the event of your demise during the policy period. However, you do not get any survival benefit if you outlive the policy term, as term insurance does not have cash value.
While buying a term insurance policy online is easy, many insurance buyers do not know if they can extend the term insurance policy’s tenure. So, let us address this all-important question.
Can you extend the term insurance policy tenure?
The simple answer is Yes. You can extend the term insurance policy’s tenure and renew the same. Typically, if you have purchased a long-term policy, you may get coverage until you are 60-70 years old. At the end of the original term, if you want to renew the policy and extend the coverage tenure by paying the adjusted premium based on your age at the time of renewal. Each time you extend the coverage tenure, the premium will keep increasing.
Many times, people tend to avoid extending the term insurance tenure because of the increase in the premium. If you are wondering if it makes sense to pay the increased premium? Let us tell you under what circumstances it is advisable.
- If you need coverage only for a short-term like two or three years after the end of the original insurance term, you can extend the tenure and pay the adjusted premium.
- If you are over 65 years when your term insurance policy expires, you may not be eligible for new term insurance. In such a situation, you can extend the tenure of your existing term plan and get coverage by paying the annual premium.
If you are not comfortable paying a higher premium, is there a way to extend the term insurance premium tenure? Yes, you can change the term insurance period in the following cases.
Convert your term insurance policy into a regular life insurance policy
It is one of the best ways to extend your term insurance policy tenure. However, you can convert the policy only if you have purchased a convertible plan. There may be a clause for converting the term plan in your policy document. Also, you can convert your term plan only after a specified time, as mentioned in the policy terms and conditions.
Auto-renewal of the policy
Another situation where you can extend the term insurance period is if you have purchased a term insurance renewal plan. In this case, the policy tenure will automatically extend by a specific pre-decided term or until you attain a particular age.
A significant benefit of buying a renewable policy is that you can renew the same even if you are diagnosed with any critical illness during the policy period. However, you must know that if you are diagnosed with any disease, you may have to pay a higher premium after detection of the disease.
Purchase a long-term policy to get coverage for a maximum period
To ensure that your family gets coverage for a maximum period, it is advisable to purchase a term plan with the longest term, provided the premium for the policy fits your budget. If you find it hard to decide the right policy duration, assess your financial needs and goal and decide accordingly.
