When shopping for term life insurance coverage, you may have come across the term “renewable term life insurance.” What exactly does it mean when term life insurance is renewable? How does this form of term life insurance work? Let’s take a closer look at this form coverage and how it can work for you.
Renewable terms are typically clauses found within term life insurance policies. Renewable term life insurance is temporary coverage that allows you to renew your coverage term for continued financial security. You can continue your term plan so long as you are up-to-date on premium payments and you do so within the specified time period.
Renewable terms within life insurance policies are ideal to ensure you have continued affordable life insurance coverage. With all the uncertainties that life can bring, knowing you have the option to continue your coverage can be reassuring for the insured and their beneficiaries.
When your initial term life insurance period ends, typically after 10, 20, or 30 years, you have the option to continue your coverage for another term period. This renewal usually happens without the need for a medical exam. This unique benefit makes it easy for people with medical issues to secure coverage without reapplying for a plan. However, this ease of continued coverage will likely come with higher premiums to compensate for your older age. Also, you will have a cut-off age where you can no longer renew your coverage. This cut-off age can vary depending on the insurer.
You can learn more information about our term 10 life insurance, term 20 life insurance, and term 30 life insurance plans here on our site. Each plan has renewable terms allowing you to continue your coverage when you need it most.
There could be several reasons why you’d continue your term coverage for another temporary period. Some common examples include:
If you still have temporary needs and obligations, renewable term life insurance can be helpful. This plan can provide you with the quickest and most efficient way of continuing your term coverage for another 10+ years.
Annual renewable term life insurance is a form of temporary coverage that stays in place for a year. At the end of each year, the policy renews, and premiums are reassessed and updated.
This form of coverage is one of the most affordable on the market for the few initial years you have the plan. But because it is renewed every year, your premiums are likely to increase each time you renew. This facet of the coverage means it can get expensive over time. It is best to use this form of term life insurance for short-term needs.
Alongside renewable term life insurance is convertible term life insurance. These are often confused with each other, but they are very different.
As mentioned above, renewable coverage focuses on extending your current temporary life insurance for another coverage period. So your coverage continues, but only for another predetermined period of time.
Convertible term life insurance, on the other hand, allows you to convert your term life insurance into a permanent policy. Like renewing your term, converting to a permanent life insurance plan doesn’t require you to undergo a medical exam, making this an easy way to qualify for lifelong coverage.
After having a term life insurance plan for 10, 20, or 30-years, you may find yourself thinking about converting to a permanent plan. Once the term ends, you can easily convert to lifelong coverage, and here are some reasons why a permanent option may suit you.
Before converting to a permanent plan, ask yourself why are you converting? You should always have a goal in mind before you convert from a temporary policy. Also, ask yourself, what can you afford? Don’t convert simply because you have the option. Permanent options are more expensive but are balanced out with reliable coverage for life. These two questions will help you understand if converting your term policy is right for you.
We help Americans find reliable and affordable term life insurance solutions. Our coverage options can easily fit into any budget and work for your unique financial needs. Each plan provides up to $750,000 in benefit amounts with fixed premiums and no doctor visits required to apply.
For your personalized, free no-obligation quote and a list of recommended plan options, complete our short free quote form now!
Written by: Adam Bianco