The importance of term life insurance renewal can never be exaggerated enough. If you own a term plan and suffer a major illness just before the expiry of the policy, you will not be able to buy a fresh policy. When you renew term life insurance, you get a chance to extend the coverage because the company cannot refuse the renewal of the plan if the original policy had the option of policy renewal.
There is no medical test required for renewal. This indicates that your health history does not matter during the renewal of the policy. When there is an option of renewal in the policy, the insurance company will renew it without any additional requirements. The only requirement for term life insurance renewal is that the policyholder should be in the appropriate age bracket. Those with a consistent premium payment and an insurance cover, which has not lapsed yet, can renew the policy with ease and convenience. Here are a few reasons why you should renew term insurance.
1. To achieve the main purpose of insurance
If you fail to renew the policy on time, the coverage of your policy will lapse and if any eventually occurs during this period, then your beneficiary will not be able to receive the stipulated sum assured if an unfortunate event takes place. The purpose of the term plan is to secure the future of your loved ones in your absence. In order to achieve the same, you need to pay the premium on time and renew the policy.
2. To claim tax benefits
With an insurance policy, you not only provide for the financial security of your loved ones but also manage to save tax. Term insurance can act as an ideal investment. It is a saving tool to reach your financial goals. When you pay the premium on your policy, you can enjoy tax benefits under Section 80C. If you do fail to pay the premium, the policy will lapse and you will not be able to avail of tax benefit.
