Important points to remember when you outlive your Term Life Insurance Policy?
Buying a term life insurance plan comes along with several benefits. These plans do not only have affordable premiums but also offer the necessary peace of mind, along with a complete sense of security to you and your family members. A term life insurance policy is purchased for a predefined term, and the premium you pay is based on that term.
But the question is, what happens to your term insurance policy in a case where you outlive it? Many would tend to think that when you reach a stage like this, you would no longer need a life insurance policy. This scenario may mostly apply if you are no longer paying debts or do not have the responsibility of dependents. However, that would not always be the case. So, what exactly should you do when faced with a situation like this? Here’s the direction that you need: –
Identifying your need
A question you will have to ask yourself at this juncture is– “do I really require life insurance?” If the date of expiry of your current policy is approaching, you can recheck your coverage requirements. This will help you to know if you require less or more coverage.
If your term is ending and you think that you may require to continue the coverage, then you must contact your insurer before the expiry of your policy. In the end, you will have to decide based on your need for term life insurance.
When you decide you don’t need a term life insurance cover.
If you outlive your term life insurance plan and choose not to renew it, you won’t have to pay any further premiums. This would also mean that your family will no longer have the eligibility of getting death benefit if you die after the policy expires. Hence, you need to think about it well in advance.
Cashing out a term insurance plan
The caveat of a policy like a term life insurance is that there is no cash value, unlike many other whole life insurance plans. It is a known fact that no one wants to pay for a thing they will never use, but think of travel insurance, for instance. You purchase travel insurance and pay the premium, but there is a very less chance that you use such a service. The limitation on the cash value of term life insurance policy is another factor which makes it more affordable than the other policies.
Life Insurance is always a necessity.
If you have a family, you’ll always have financial responsibilities. It is also essential to know that your life-stage might be different from when you first bought the policy. That is why it is imperative that you connect with your insurance provider, understand the needs associated with your life stages, and invest in term insurance accordingly. One such platform that offers term life insurance as per life stage is BimaKaro.in. You should visit the website if you are looking for a term plan, as there is no substitute for staying covered with the right life insurance policy.
How to establish the amount of life insurance coverage you need?
The below-mentioned list of elements influences the type of and how much term insurance you will purchase:
- Your family’s financial cushion
- Outstanding debt
- Dependents, inclusive of children as well as ageing parents
- Future college tuition cost
- Your end-of-life costs
Reiterating the importance of term life insurance
When you have a term insurance policy, and there is an eventuality, your family members get financial security in the form of the sum assured. In some term insurance plans, the pay-out can also be in the form of monthly or yearly income. This helps the family in taking care of household expenses, financial liabilities, and other costs. Other advantages of term life insurance include cover for critical illnesses, tax benefits, and many more. You can even add insurance riders to your existing policy to expand the scope of coverage for your loved ones. Riders have a nominal fee and can be taken as per your requirement.
A great thing about term life insurance is that the premium of every term plan is lower as compared to other insurance plans. Term plans also give you an adequate amount of coverage while being easy on your pocket. Hence, term life insurance allows for high life coverage at an affordable cost.
Buying term insurance is always a sensible decision, given the uncertainty of life. In the end, do remember that the amount and type of life insurance you purchase should be based on the financial responsibilities you have. So, in instances where you outlive your term life insurance, weigh all the options before you make your decision.