Life Insurance is designed to cover you and your loved ones in case anything unfortunate should happen. People take out life insurance to pay off debts, cover funeral costs or provide help to your family if they rely on your income. If your policy is coming to an end and you’re wondering what to do there are plenty of options.
Renew the policy
If you’ve received a renewal notice for your life insurance policy and you still have dependants who rely on you financially, or a spouse who is close to retirement then you may want to look at renewing. You can renew for an additional period equal to the term in which the contract was originally written. Term life policies are exactly what it says on the tin, they can last from 5-30 years and at the end of that time your cover will end. Usually you can renew your existing term without a medical exam, however renewal can come with increasing annual premiums.
Purchase a new policy
Things change in life, so why not look at purchasing a new policy that reflects that. For example, you are expecting to have kids now, you own a home, you’re getting married or you’re looking towards retirement. Any life event can alter the level of cover you need now compared to the level you needed say 5 or 10 years ago, so take advantage of t
he end of your term to look for a new policy. Plus, you’ll probably get a better deal on a new life insurance policy than you would renewing.
If you had term life insurance and you’re 50+ you might want to consider a whole of life policy. With this policy there is no end date and you’re insuring yourself for the rest of your life, with a pay-out in full when you die.
Your cover may have been adequate when you took it out and throughout your term, but now it’s ending consider shopping around. You don’t have to remain loyal the to insurer you had your previous policy with – they may have been the best 30 years ago with the cheapest option, but not necessarily anymore! Since people are now living longer, policies are relatively inexpensive. If you’re wanting to shop around speak to a whole-of-the-market intermediary here who can search and compare all the providers for you.
Cancelling your policy
Of course, you may not want life insurance anymore at all, in which case when your term ends don’t renew. You can cancel a policy at any time without a fee but bear in mind you won’t be covered from that date, and you won’t get a refund on any payments you have made. You might want to consider paying annually instead of monthly if that reduces the impact of cost for you. However, if you have dependants or want to make sure people are protected in the case of your death then having life insurance is a sensible option.
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The above post is intended to be informative but does not constitute advice – financial, legal or otherwise. Any opinions given are the author’s own and do not necessarily reflect the views of SO Media.