If your term life insurance coverage is set to expire take a close look at your options before it does. Letting the policy lapse before planning for your ongoing life insurance needs can leave you uninsured and unprotected.
Weigh Your Choices While You Can
While you still have a term policy in force, you may be able to:
Take advantage of any conversion or renewal options of your current policy. If you have a guaranteed renewal policy, you can renew for another term without having to prove insurability, which can be crucial if you’ve developed health issues. The premium for the new term will be higher than your previous premium because you’re older, and you may have to switch to a more-expensive annual-renewable plan rather than a level-term plan. But if you have major health problems, the guaranteed coverage could make this your best-or possibly only-option.
If you have health issues, don’t assume you’re going to qualify for underwriting. It may be that the only way you can get insurance-other than paying for very expensive policies that will cover anyone-is to stay with your current carrier. You want to know that before the policy expires. Some policies also allow you to convert to a permanent policy (e.g. whole, variable) at the end of your term. Permanent policies have advantages in certain situations, and-if you have a conversion option-you should talk with a financial planner about whether a permanent policy would best meet your objectives.
Shop Around For The Best Deal On A New Policy
If renewal or conversion benefits aren’t causing you to remain with your current carrier, it pays to look around for better deals on term policies than the current carrier offers. Websites that aggregate quotes from multiple carriers allow you to easily compare rates at your convenience. And the competition among carriers drives rates down.
Of course, you can do this comparison shopping after your current policy expires, but that would mean you would either be without life insurance coverage or you would have already bought a new policy with your current carrier-probably at higher rates than if you had shopped around. At that point, if you found a better rate, you’d have to incur the first-time charges-not to mention deal with the hassle-of opening another new policy.
When comparing policy rates, be careful to pay attention to all the terms of the life insurance coverage-not just the price and the death benefit amount. There is price differentiation among carriers, and that’s why shopping around is so important. But if you find significant variation in price, chances are there’s a reason for it, probably related to policy provisions.
Tell Your Current Carrier What You're Doing
Call your current carrier and discuss the situation with them. They may possibly be willing to offer discounts to entice you to stay with them rather than go to the competition. If you have renewal or conversion options, they can discuss your options based on the specifics of your policy.
The Bottom Line
There’s no sense in letting life insurance coverage insurance expire without first examining whether you still need it. If you do still need coverage after your current policy expires, you will have lost the opportunity to:
Take advantage of renewal and conversion option.
Possibly get a better rate on a new policy from your current carrier than you can from the competition.
Qualify for underwriting when you can’t otherwise.
If your expiration date is approaching, make sure to consider your ongoing life insurance coverage before it’s too late. To get a life insurance quote or to receive more information visit goldcoastlifeinsurance.com or give us a call at 800-301-8113.
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