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My Term Insurance Policy Is Expiring…Now What?

my-term-life-insurance-policy-is-expiring-now-what

You were a good spouse and protected your young family and home with a term life insurance policy 20 years ago. 

But now that policy is about to expire.

… and you’re thinking, “What happens if you outlive your term life insurance policy?

That’s a great question, and an important one we hear all the time. Let’s cover the most important considerations for you the consumer.

Quick Article Guide:

Say your policy ends. Do you still need life insurance?

The premise for buying term life insurance is to carry enough coverage to replace the income lost if you die prematurely. When you were the young bread winner, you probably bought enough life insurance to replace 10 to 20 years of your income. If you now have little debt, and enough in savings and assets that your family would be OK if you died tomorrow, you may not need life insurance. You should be able to just let your term policy run its course.

If you’re like most Americans though, you may need to continue to carry coverage for final expenses, outstanding debts, or replacement income.

Will my term policy automatically expire?

Expired PolicyWhen your policy reaches the end of term, or rate guarantee period, your policy typically won’t automatically end. This could be a good or bad thing.

If you look towards the back of your policy, there’s a table showing your year to year cost – it’s sometimes called a rate or premium illustration. If you bought a 20 year policy, you’ll see a pretty significant price increase in year 21, after your term has expired, and continue to see significant price increases year after year.

If you no longer want the policy beyond the low cost guarantee period, and you are making automated payments, you’ll want to notify the insurance company you wish to cancel the policy at the end of the term. Otherwise, that big price bump could be debited from your checking account without warning. Many people switch to paper check payments in their final year to eliminate that risk.

Why keep my term policy going if the price jumps significantly?

I’ve had situations where a client found out they had stage 4 cancer or a terminal disease, and only a few months remaining on their term policy. Though the monthly premium was going to double or triple at the end of the term, it made sense for the family to pay the premiums for a year or two to receive the likely death benefit.

Remember, proceeds are paid tax free in a lump sum at time of death, and with a long illness and hospital care, there will likely be sizable bills which your family will be responsible for. Debts don’t die with us.

If you are still in fair or better health, buying a new life insurance policy is probably your most affordable option.

“I’m not dying, but my health isn’t great. How can I keep my policy?”

converting term to permanentOne of the most valuable features of a term policy is the ability to “convert” it to permanent life insurance (usually a guaranteed universal life (GUL) policy), for the original or reduced death benefit, with no proof of health.

Your policy is only eligible for conversion during the “term” of your policy; once your term has expired, converting your policy is no longer an option. In addition, some companies have cut-off ages for their conversion options, so make sure you do not delay until it’s too late.

Most of us buy life insurance when we’re young and healthy; 20 to 30 years later, we’re likely to have health issues that would make a new life insurance policy cost prohibitive. Some of us may not qualify at all. Yes, unfortunately that beer and pizza eventually catches up with all of us.

When is conversion your best option?

If you have serious or terminal health issues, the guaranteed conversion option for your term could be the best solution. The cost of permanent lifetime coverage is expensive, but you shouldn’t need as much coverage now as you did when you were younger. Some insurance companies will allow you to drop the death benefit to $100,000 or even $50,000 for their policy conversions.

Contact your insurance company to discuss your options now. The rates aren’t guaranteed until you actually make the conversion, however, they should be able to provide illustrations so you’ll have good estimates. Keep in mind once you decide on permanent life insurance, it’s an expense you’re committing to for life…choose an amount which is affordable now and projecting into the future.

One more thing: your policy death benefit doesn’t have to be a round number. You could determine your monthly budget for life insurance (“I can afford $75 a month…how much life insurance will that get me”). Your agent will be able to provide you with an approximation of the amount of insurance you’ll be able to secure without going over your budget.

Retiring soon with pension options?

retirementIf you’re nearing retirement, and one of the fortunate few to have fixed pension options, it’s a good idea to review your life insurance alternatives and pension elections now. You’ll have a firm deadline and may need an approved life insurance offer first so you can evaluated more than hypotheticals. Applying for life insurance with any past health issues could take 12 weeks or more before receiving an underwriter’s decision.

Some pensions may only pay you 65% of your maximum benefit if you take an option where your spouse continues to receive payments if you die. It may be better for you to take your full pension, and use that 35% difference to buy life insurance and save/invest the difference. This strategy is commonly referred to as pension maximization.

If your health is below average, that guaranteed conversion option from your term life insurance policy to a Guaranteed Universal (GUL) policy may be be the best way to go. Again, this is available to you, no questions asked. Have your insurance agent or financial adviser review your options. If a new term life policy seems like a viable option, you may want to do a free term life insurance exam to get a firm “offer”. You don’t have to buy it, but you’ll have good idea where you stand in the eyes of an underwriter.

I’m in better health now…can I apply for a new term policy?

The answer is generally YES, as long as you have income other than social security. If that’s all you have, you’re likely going to qualify for a smaller burial policy.

Otherwise, check with a life insurance agent and ask them to “re-shop” your coverage with multiple companies. Your best rates today will likely come from a different insurance carrier than you originally were with. A good agent will review your health, lifestyle and other risk factors and provide accurate quotes by phone.

If you’ve quit smoking, lost significant weight, or otherwise improved your health, your rates could be pretty attractive compared to what you had in the past. Our agents are happy to assist, give us a call toll free: 855-247-9555.

For most of us, the cost of a new policy comes with a bit of sticker shock. The cost of term life insurance has come down over the years, however, you’re older (can’t avoid that!), and insurance companies are looking at our age at the end of a new term (rate guarantee period). If you’re 60, and buying a new 10 year policy, the amount of coverage that you can qualify for now is going to be different.

Insurance companies use income multipliers based on age and income to determine what you currently qualify for. It’s not about how much you want, or your family will buy for you, but the amount of financial loss they would suffer if you died. To put it bluntly, you can’t be worth more dead than alive…..or replace a 72 Pinto with a Rolls Royce…that’s not how insurance works.

Why buy term insurance?  It will still give you the best bang for your buck during your financially vulnerable years.

Am I better with a short or long term policy?

This question is answered by what you’re protecting today. Have a few years left on a mortgage, or short term business or private loan? A divorce decree requiring less than 10 years of coverage? A  10-year term will typically be the most affordable short term life insurance policy, and you can easily cancel it once you no longer need it. On the other hand, if you’ve remarried and started over with a young family, a longer term 15 or 20 year term policy could be a better fit.

How about those final expense or burial policies?

There are, of course, a number of life insurance types. If  you’re considering a new “final expense” or “burial policy”, you’ll need to re-qualify at your current age and health. If you’re in good health, and under age 55, the policies can be affordable. Most states recommend $12,000-$15,000 for final expenses, though more is generally needed.

At age 55, you’ll be looking at around $43 a month for $25,000 coverage for a healthy male; $37 for a healthy female. If age 65, the price is about $71/$59 monthly because the insurance company has 10 fewer years to collect the money and a higher mortality risk to insure. If your health is worse than average (a good life insurance agent will help you figure this out) you’ll be looking at a cost roughly 20% higher and with a 2-year waiting period.

Keep things affordable. Something left behind is better than nothing, and anything is appreciated. Payments should be like your other monthly bills that you can always afford without a financial strain. With final expense or burial policies, you or your family needs to pay to the end, otherwise you’ve thrown that money so make sure your policy is affordable. We also recommend avoiding companies with increasing premiums.

What to Watch Out For…

Companies like AARP will continue to raise your rates every 5 years until the policy becomes un-affordable. If you miss a month or two paying your life insurance premium, your policy will typically lapse. If you’re self disciplined, you’re usually better off setting money aside the money in an account, just in case there are months when you can’t afford to contribute.

Call UsIf you’re not sure where to begin, give us a call, our agents provide a free, no-pressure, consultative approach to life insurance. We’ll compare dozens of companies in minutes to show you your most affordable options. Toll Free: 855-247-9555.

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Randy McClintick

33 comments… add one
  • Edwina Rawls May 2, 2016, 2:30 pm

    At the end of a term life policy, do I receive the money? What are the stipulations?

    • Randy McClintick May 3, 2016, 4:45 pm

      Edwina,

      Term life insurance has no cash value unless you purchase a “Return of Premium” type of policy. If you keep the policy for the full duration and outlive the policy, you receive every penny you paid in. The cost differential can be very affordable if the “ROP” policy is purchased in your 20’s or 30’s. Any later, they will be very pricy. Most of our clients purchase the least expensive term policy available for their age and health and invest other funds independently so there’s more flexibility in future years.

    • Randy McClintick May 3, 2016, 5:00 pm

      Edwina,

      Term life insurance has no cash value unless you purchase a “Return of Premium” rider. With the rider, you receive every penny paid in if you make your payments for the full “term” and outlive the policy. These policies are generally affordable if purchased in your 20’s or 30’s…they’re pretty pricey if you get started any later. Most of our clients opt to purchase the lowest cost term policy they qualify for, and invest separately. This way they retain flexibility, making adjustments to investments as become necessary, and ability to access money earlier than waiting until the end of the life insurance term.

  • John Russell June 4, 2016, 7:26 pm

    I took out a life policy of 25yrs ago will I get a part payout if I’m still living after the policy has ended?
    Rgds, John

    • Randy McClintick June 7, 2016, 11:57 am

      John,

      Thank you for your question. If a policy will be “ending” after a period of time, it’s typically term life insurance. Standard term insurance has no “payout” other than a death benefit. There are some exceptions…for instance, “return of premium” term life insurance returns all money paid in if a policyholder outlives the coverage. These policies aren’t very common as premiums are sometimes 2-3 time the cost of traditional term insurance. Give your insurance company a call to verify what you have. While you have them on the phone, ask if you have an option to convert your term policy to permanent coverage. This can be a very valuable feature if your health is now sub-standard, as your “risk class” is based on your health when you originally bought coverage, and you will not be required to re-prove your health at this time as there are no new health requirements for these “policy conversions”.

  • Elaine Shapiro August 22, 2016, 5:43 pm

    We bought a 20 year term life insurance policy when my husband was 59 years old and paid a handsome premium of $3595 all these years. He will soon be 79 and the policy will terminate. We only got a bill every year and did not know that our agent passed away a few years after we bought the policy. The Ins firm claimed that he was an independent agent and they were not aware of his passing either. We were never informed that we could have converted this policy to Full Life over these many years (especially in the earlier years) and now the cost of extending the policy is way too expensive. We feel the insurance company was negligent in this regard–as we should have been advised of possible options -do we have any recourse?. My husband is in decent health. Name of ins company is available if needed.

    • Randy McClintick August 23, 2016, 10:02 am

      Mrs. Shapiro,

      Thank you for contacting JRC Insurance and sharing your question.

      Once a person has passed the age to exercise the “conversion” option for their term policy, there are two options as you’ve learned…letting the policy expire or extending it “year to year”. The cost to extend is quickly unaffordable, and is generally exercised if a person is in very poor health and with little chance of surviving the year or two following the end of the fixed cost portion (the “term”) of their life insurance.

      We have a few articles about term life insurance conversion. Unfortunately, it’s easy to miss the conversion date as few people review their policies once acquired, and insurance companies and agents rarely contact policy holders to alert them of the pending deadline. The flipside of a policy conversion is the cost “permanent” life insurance is much higher than term coverage since the life insurer will certainly pay a death benefit at one point. Therefore, most people reduce the death benefit significantly to keep premiums about the same, which can undermine the value of the policy in protecting the beneficiary.

      Fortunately, your husband may still have some options for qualifying for a new policy. We work with some highly rated carriers which specializing in insuring men applying in their 70’s. 79 is the cutoff for fixed rate term coverage (they’ll offer up to a 10 year term) and we also work with carriers which offer Guaranteed Universal Life (“GUL”) coverage which provides a guaranteed death benefit and premium to a specific age (90, 95, 100, etc.) rather than a 10-year term. At your husband’s age, we’ve actually some policies to age 95 price better than a term to 89. Like a term policy, you can cancel, should you choose, without penalty. To provide future flexibility, some “GUL” policies allow you to reduce the premium and corresponding death benefit. Policies and carriers vary by your State of residence.

      First step would be for you to call us and review your husband’s health profile to determine his options. We’ll then email his pre-qualified quotes to you for review. If you wish to move forward, we’ll explain the application process. Likely what your husband did 20 years ago…a licensed nurse will come to your home to provide a free insurance health screening and bring a copy of the application. Approval at your husband’s age generally take 6 weeks or so and age for some companies determined by birthday you’re closest to, so you likely in your best interest to get the ball rolling soon.

      JRC is fully licensed and approved by the BBB. There’s no cost or obligation for our assistance. Helping prospective clients compare quality, “no loophole” life insurance options is what we do.

      Our primary phone number is (855) 247-9555. Thanks again for reaching out to us. We look forward to helping you and Mr. Shapiro.

  • Penny Kingsbury December 13, 2016, 8:20 pm

    My husband’s term insurance ended but GWL continued the policy without our consent extracting 6 x’s the money from up bank account for 19 months before we noticed it, is this legal? We don’t get bank statements and we’re having with online banking. I was furious and can’t understand how they can do this.

    • Randy McClintick December 21, 2016, 2:39 pm

      Mrs. Kingsbury,

      Thank you for visiting JRC’s Life Insurance Site.

      Term life insurance doesn’t automatically cancel at the end of term…as you’ve experienced, it does change price, often jumping considerably in subsequent years to the point where it’s eventually unaffordable. This period beyond the “term” (rate guarantee period) can work to your favor if the insured person is in very poor health near the end of their term with little chance of surviving.

      My 15-year term policy through Genworth reached the end of it’s term in September. I received 3 letters reminding me the term was ending, asking if I wanted to reapply. My kids are now grown, so I didn’t need another term policy, so I took myself off the monthly “auto pay” and allowed my policy to lapse.

  • Makisha L January 8, 2017, 7:54 am

    I purchased a 20 year term policy about 18 years ago. Since then my health has declined. I’m not terminal. I’m just not healthy. Should i consider converting now my insurance to a permanent one now with that company to keep my benefit amount? Will I be required to do another medical exam? Thanks

    • Randy McClintick January 9, 2017, 12:44 pm

      Makisha,

      Yes, we recommend contacting your insurance company and asking about your “conversion” options. If you’re within the age guidelines stipulated in your policy (often before age 65, 70 or somewhere in between), you’ll be able to convert your term policy to a permanent policy without and new health questions or requirements, and at the same health “risk class” as when you originally qualified for your policy.

      This can be one of the most valuable features of a term life policy…a low cost, and guaranteed option to convert at the original health class, regardless of how your health changes over times.

      In my personal situation, I qualified in my 40’s at the #1 “Preferred Best” risk class with Genworth. Since then, I’ve had 2 bouts of melanoma, yet, I was given the option of converting my 15-year term policy to a lifetime “universal life” policy at Genworth’s Preferred Best risk class rate for my current age.

      Be advised your new policy can be at the original death benefit of your term policy, or a lower amount. Most people require less life insurance once their term policy reaches the end of term…kids likely out of school and independent, you have a smaller balance on your mortgage, and fewer working years ahead of you….in other words, your death today would represent a small amount of lost future income for your surviving family.

      When make a term to permanent life insurance conversion, most of our client reduce their death benefit to $100,000 or so. Rule of thumb is to reduce to a monthly payment you’ll be able to ALWAYS afford. Otherwise, if you get in a bind down the road and stop making payments, you’ll lose everything you’ve “invested”.

      Best of luck!

  • Ronald Jones February 15, 2017, 7:55 pm

    Hello,
    My question is this: We been with a ins company for both life and term. We got the life insurance at 27 years ago, and we recently was told that the end of the 70 year policy was coming up in 9 years. We were told that once it’s done…that would be the end of our ins…saying that I would not have access to the $58,000.00 if and when it ends. My wife has a policy for $26,000.00. He, the ins agent said the same for my wife. That once the policy is finish, we don’t have access to it. Is this correct?

    I’m in fair health…and I’m 60…
    I took out a $250,000.00 Term life insurance 5 years ago….so, the agent received I change the term down to $200,000.00 and you $50.000.00 to cover me once the term insurance ends…

    I feel that I’m paying too much, and wondering what can I do to reduce the cost…

    Thank you for youremembering help…

    Ron

    • Randy McClintick February 16, 2017, 10:36 am

      Mr. Jones,

      Thank you for your question and visiting JRC’s Life Insurance site.

      If you have your policies available to review by phone, you’re welcome to call us and we’ll help you analyze what you have, what will happen over the coming years, and your current needs for insurance. You’re only a couple years older than me, and can tell you’re wise in looking at your options while you still have them. Unfortunately, many clients contact us after they’ve reached the end of a term or when the cash in a cash accumulating policy has already been depleted.

      As part of our analysis, we can “work backwards”, if you like…let us know what premium amount (insurance cost) is comfortable in your budget, and we’ll review your health/medication history which insurance companies are your best fit, and how much term or guaranteed universal life (works like low cost term insurance, but to a specific) you’ll likely qualify for. If we determine you can’t do better than your current coverage, we can at least offer suggestions as to how you may be able to restructure that coverage to reach your goals and budget.

      One of my partners, Jason Dana, is especially good with this type of analysis, and a great guy to work with. Jason’s direct line is (855) 322-0782.

  • Cathy Jones March 26, 2017, 6:02 am

    My father bought a whole life policy for me when I was two months that I never knew about the insurance company sent me a letter saying it had matured and then they sent me one saying it had expired so what happens to the money?

    • Randy McClintick March 27, 2017, 9:55 am

      Ms. Jones,

      Thank you for your question and visiting JRC’s life insurance website.

      The meaning for the word “mature” varies by company and insurance policy, so you’ll need to contact the insurance company directly to verify how the contract your father bought was written. A whole life policy often matures at age 90 or 95, meaning the company will return cash value rather than pay the stated death benefit. Your policy was a “juvenile” policy. It likely matured at a younger age, but could have been written so that no premiums (payments) were required after a specific age, with the built up “cash value” covering these payments for a specified number of years. Once those years passed, the policy could have “expired”.

      Policies purchased for infants are usually $5-10 per month in cost, so there may not have been a lot of money to cover your premiums as an adult. Again, call the insurance company to verify and see if you have any options remaining. If you need a new policy to protect your own children if you die prematurely, call JRC and we’ll be glad to compare rates for 40 highly rated insurers to find your best value. We’ll make sure you fully understand what you’re buying so there are no surprises down the road. Our toll free number is (855) 247-9555

  • Yolle Desruisseaux April 6, 2017, 1:47 pm

    It is normal to buy term insurancece.
    If i already making Payment and later you find out the agent didn’t tell you the thru what should i do.

    • Randy McClintick April 6, 2017, 2:22 pm

      Yolle,

      We don’t understand your question. Call us at (855) 247-9555 and we’ll try to help.

  • ailsa matthews May 22, 2017, 7:26 am

    My husband died 11 months after his life insurance ran out he paid it for 25yrs am i entitled to anything.

    • Randy McClintick May 23, 2017, 9:36 am

      Mrs. Matthews,

      Thank you for your question and visiting JRC’s life insurance site. We’re sorry for the loss of your husband.

      We can fully answer questions on specific policies if they were purchased through our insurance agency. You should contact the insurance company’s claims department and ask. Term life insurance is valid while you’re paying for it, and whole life policies can be prepaid to last beyond when you stop paying for it.

  • Sarah June 5, 2017, 11:06 am

    My husband and I are both 47 years old. We have only 10 years remaining on the 20 year term policy we previously purchased. He is the primary wage earner and we depend on his income. We are thinking about letting the old policy lapse and then purchase another 20 year policy to get us coverage to retirement age. Does that sound okay…only getting a Term Policy to age of 67 years?

    But what do people do for the funeral expenses, etc. after the term policy expires? I’ve been pricing whole life and final expense policies, but they tend to be very expensive and cost-prohibitive for us to purchase in addition to the Term Life we need to purchase for income replacement. And we know those rates will significantly increase the older we get, so we want me make appropriate considerations now.

    What do people usually do for final expense? What do you recommend?

    • Randy McClintick June 5, 2017, 11:57 am

      Sarah,

      Thank you for your question and visiting JRC’s life insurance site.

      Your question is a common one brought to us, and we believe you’re considering the correct term length to cover your must vulnerable years until your husband approaches retirement age.

      Many consumers are unaware they can carry multiple life insurance policies. At age 47, your husband is eligible to have a total of 20 times his annual salary, with thinking that if he died tomorrow, you’d need roughly that amount to replace the income he’d generate between now and retirement.

      When he bought his original policy 10 years ago, he likely secured a very favorable rate on that 20 year term. We’d like to help you compare the cost of coverage of either adding a new 20 year term to overlap the 10 years remaining, or replace that policy with a new 20 year term policy. His current health underwriting will help determine what will be the favorable option. Give us a call at (855) 247-955 and we’ll provide a courtesy underwriting analysis and email the options pricing best from A-rated life insurers doing business in your state of residence.

      In regards to “final expense” life insurance, most people choose one of two options. He could “self insure” by setting money aside (perhaps using the money you no longer are spending on his expired term policy at age 67), in a specified savings/investment vehicle. He would also have the ability to “convert” his expiring term policy to a smaller lifetime policy. This “conversion” option is set up for situations as you’re describing. When you’re about to retire and be on a fixed income, you typically don’t need nearly the amount of life insurance as when you’re in the midst of your earning years.

      Almost every term life policy includes this conversion option. Most explore it about a year before the term policy expires. The death benefit can before the original or lower amount. Most of our clients reduce their term policies to around a $50,000 death benefit…enough to cover most final expenses. It would still come to you tax-free. When you convert from a term policy to permanent lifetime coverage the cost basis is higher since the insurer is guaranteed to have to pay one day. The good news is, though you may not exercise this option for 19 years or so, there is no new health underwriting.

      For example, if he qualified for a low cost/best health category now, he’s guaranteed that same risk class even if he were to suffer cancer, a heart issue, or any other medical problem. This is guaranteed conversion option at original health category is one of the best reasons for securing term insurance. You get a low cost now, with guarantees later should you need coverage beyond the term length.

      We’re happy to explain this further and answer questions you may have. Give JRC a call at (855) 247-9555

  • Peggy Hoffman August 21, 2017, 2:06 pm

    I am 52 years old and my husband is 73 years old. We have young boy is 9 years old. We have low income. What do you recommend to us, which insurance policy is fit for us and affordable ? Both of us, my husband and I are healthy, has no health issue problem.
    Thank you

    • Randy McClintick August 22, 2017, 9:06 am

      Mrs. Hoffman,

      Thank you for visiting JRC’s life insurance website and your question.

      The need for life insurance varies by priorities, and what financial concerns are greatest if a bread winner dies. With a 9 year dependent upon you, we’d assume the greatest priority is to make sure that if you or your husband dies before your son is out supporting himself, that the surviving parent can provide the same standard of living and stay in our current home.

      Therefore, most people in your situation purchase “term” life insurance. It provides the highest death benefit for the least amount of money, since you’re only carrying while you’re most “financially vulnerable”. In this case, it would be the next 10 or 15 years, until your son is 19 or 24.

      The cost of insurance is based on the amount of the death benefit, and age and health when you first purchase/qualify for coverage. Being in good health will make a big difference in your case. Your husband’s age works against him, since an insurer will be committing to provide him coverage, regardless of whether his health changes, until he’s 83 or 88, within that age range when many men die.

      We can help. JRC works with over 40 top-rated life insurance companies, including those providing most competitive rates for men applying in their 70’s.

      The death benefit amount can vary for you and your husband. The insurance carries determine the amount you can qualify by approximating the number of years you’ll likely be working until retirement. Your husband can likely qualify for 5-10 times his annual income, and about 10, 15 or 20 times annual income for your self. If one of you is not working, the amount of life insurance for the non-working spouse can’t exceed the amount of the working spouse.

      Call JRC today at (855) 247-9555 and a licensed agent for your state will pre-qualify you both by phone (it’s a free service) and determine the best rates you’ll each likely qualify for. If you wish to apply, we’ll help with those arrangements and be your advocate through the process. Again, there’s no cost to you for our help and advice. We’re compensated by whichever insurance company you choose…they like JRC’s ability to bring them pre-qualified customers purchasing life insurance to protect a child, not to “create an inheritance”.

      Thanks again for your interest…we look forward to your call.

  • Catarina Fernandes October 20, 2017, 7:12 am

    My husbands life insurance matured 3 years back and he got the payment on maturity now he expired few days before does he get anything

    • Randy McClintick October 23, 2017, 10:55 am

      Ms. Fernandes,

      Thank you for visiting JRC’s life insurance site and your question.

      You will need to contact the agent you purchased your husband’s life insurance through, or the life insurance company directly.

  • Mike R. January 10, 2018, 6:52 am

    Hi,
    I had a $150,000, 15/15 term policy that “expired” earlier this year. They said I could continue on with coverage but my premiums would have gone from 166.00 quarterly to $2,800.00 quarterly! Then it would increase by either 50% or double [I forget which] EVERY quarter. I told them no we must eat first and losing our home over it was not in our plan. If I had been terminal [3-6 months to live] the it would have been a good idea. Otherwise, a very dumb gamble.

    • Randy McClintick January 15, 2018, 10:35 am

      Mike,
      Thank you for your comment and visiting our JRC Life Insurance website.

      You are correct…once a term insurance policy reaches the end of the rate guarantee period (“the term”), it’s only worth keeping if you have a terminal illness and short period to live. In that case, it’s better than the policy completely ending with no option.

      Term life insurance is intended to provide a large death benefit at an affordable rate during financially “vulnerable years”….raising a family, paying off the family home, etc. For myself, I let my term policy lapse one its 20 years up. There are lifetime policies which can be affordable, however, many people choose to “self insure” through their investments.

  • Ann Shannon January 19, 2018, 9:57 am

    My mother had Term Life thru AARP. Once she turned 80 they turned it over to Perm Life AARP NY Life. But the money she put in before is no longer there. Shouldn’t the money she put in before be transferred? Considering it is still AARP! So technically she is starting all over again.
    She stared in 2009 and has put in over $6500. They say her policy is only worth $2300. I feel this isn’t right.

    • Randy McClintick January 22, 2018, 9:20 am

      Ms. Shannon,

      Thank you for your question and visiting JRC Life Insurance’s website.

      We didn’t help your mother with her AARP policy so can’t answer specifics on it, however, generally speaking, payments for term life insurance are similar to your auto or homeowners insurance. Payments made are to insure against a loss, in this case, your mother’s death. If she died while covered, they would have paid the death claim to a beneficiary to help with final bills, expenses, and burial cost. It sounds like the new coverage is a type of whole life coverage, where that can be some accrued “cash value”, usually for “surrendering” the policy. In other words, if you chose to cancel the policy before she died, you’d get some cash, but generally well below the policy’s death benefit. From the insurer’s perspective, it’s less costly to pay money now rather than a higher amount at the time of your mother’s death. If it’s this type of policy, you want to keep an eye on that cash surrender figure as it will generally decrease as the person insured ages, as a portion of the “cash reserve” is used to pay premiums.

  • Tanja February 13, 2018, 2:03 pm

    Question so if someone has put money into life insurance for many many years and turns 70 and can’t afford to extend what happens to all that money she put in .. who gets it and where did it go ?

    • Randy McClintick February 15, 2018, 11:22 am

      Tanja,

      Thank you for your question and visiting JRC’s life insurance website.

      The answer to your question depends upon what type of life insurance was purchased. Term insurance, which provides a fixed cost of insurance for a fixed number of years, has no “cash value”. Your premiums are not an investment, they’re just paying for insurance to provide money to a family is a person dies prematurely. Some types of insurance, such as “whole life” may combine life insurance with an investment vehicle. As you age, the investment portion helps to pay your premiums when you’re older and your probability of dying are higher. If you cancel the policy, there can be some cash value. This is usually provided to the policy holder quarterly or annually.

      Best answer is to call the insurance company when you have the policy in hand and review it so you understand your options. Your state’s insurance commission can help if you’re having trouble finding the paperwork. Best of luck.

  • Nelson May 15, 2018, 7:06 pm

    Hi my mom has a 250k MetLife insures for 20yrs.set to expire on june5,2018 we just found out on may 10,2018 a month before it expires she has lung cancer I think they won’t renewal now after her cancer if i I pay the monthly premiums even if it drastically increase in a yr to yr basis will the payout of anything happens to my mom,hope not

    Thank you

    • Randy McClintick May 16, 2018, 3:36 pm

      Nelson,

      Thank you for contacting JRC Life Insurance and visiting our website.

      We’re sorry to hear of your mother’s diagnosis. As you’ve found out, term insurance provides the ability to continue coverage after the term (the fixed rate period) ends. Our clients generally exercise that option if diagnosed with a terminal illness, when it make sense to pay the higher rates to ensure collecting the full $250,000 tax-free death benefit. These new rates generally increase quite a bit year to year. We recommend reviewing with the agent you purchased the insurance from and/or a financial advisor, since the higher cost of insurance must fit in with other financial matters, and then make a family decision.

      You can also ask the insurance company if your mother’s policy includes a “conversion” option. This may allow a one-time option to convert all or a portion of the original death benefit term policy to permanent, lifetime coverage, without re-proving health. The cost for permanent “whole life” insurance is much more than term coverage, so review your options with the carrier as soon as possible since you have a deadline quickly approaching.

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