What to Do If a Life Insurance Policy Has Expired
A lot of things in life eventually expire. Milk expires, parking meters expire and time on the game clock expires. Term life insurance can expire as well and unlike milk, you can't just run down to the market to pick up some more. Without life insurance, you put yourself and your family at risk of financial hardship. Families find themselves in these predicaments every year. You can't add life insurance to your grocery list, but you can get life insurance quickly and easily by shopping for life insurance online if your policy expires or you need more coverage. Let's take a look at the reasons life insurance expires and what you can do about it.
Term Life Insurance
Term life insurance is actually meant to expire so when time does run out on these policies, it should come as no surprise. You purchase this insurance for a set term such as 10, 20 or 30 years. Many folks buy term life insurance through their employer and so the insurance lasts as long as they work for the same employer. Employees often renew these policies annually. Many others choose to buy term life insurance to protect something or someone for a specific period of time. For example, to protect your family from paying mortgage payments should you pass away before the mortgage has been paid in full.
If you purchase a term life insurance policy for a set period of time, and the time runs out, it expires. You can choose to shop and apply for a new policy should you still require life insurance coverage. If you plan ahead you can request that the new life insurance coverage you apply for take effect on the date your current term life insurance expires.
Permanent Life Insurance
While permanent life insurance doesn't exactly "expire", it can "lapse" and result in an end of coverage if you stop paying your life insurance premiums. Read your policy carefully to see when payments are due and if there is any grace period before a missed payment leads to expiration of the policy. If your policy coverage halts because of missed payments, it's important to turn to life insurance online to quickly restore coverage.
These policies often stop requiring payments after you reach a certain age, usually the ripe old age of 100. By this time, the cash value of permanent life insurance policies is equal to the death benefit so your payments expire even though the benefits do not. Chances are you won't live quite this long, so you will want to make sure you can make your payments.
Variable Life Insurance
A variable life insurance policy and hybrids of these policies can also expire but in different ways than term life insurance or permanent life insurance. These types of policies rely partially on your premiums and partially on investments to build the cash value and death benefit of the policy. You can pay a variable premium each month and then choose from a variety of investments meant to maximize the policy's growth.
However, investments haven't done as well in today's stock market as they may have in the past. If you paid just the minimum premium relying on investments to build the cash value, you could face a substantial payment to help the policies cash value catch up, so to speak. If you can't make the payment, your policy expires.
Having your life insurance expire can put you into a tricky position. You want to make sure you have insurance and peace of mind to take care of your family and obligations when you pass away. Letting your insurance lapse for even short amounts of time put your loved ones at risk. When your life insurance policy expires for whatever reason, make it a priority to look at life insurance online to restore coverage as soon as possible.
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