The purpose of the term insurance plan is to offer a death benefit to your dependents on an early demise. This is why you must renew the term life plan, well in time. A lapsed term plan leaves your family with no financial protection.
In case you do not renew the term life insurance plan, then you cannot enjoy the policy benefits. Your dependents will not be able to make claims and will be bereft of any financial assistance in your absence. Therefore, the renewal of your term insurance plan provides an opportunity to extend the tenure; without any hassles. You continue to enjoy the benefits of your policy at the same premiums.
What if you don’t renew the term life plan? If the policy lapses, you might be forced to avail term life insurance when you are older. This increases premiums and if you are in poor health, the insurer would deny the term life plan.
At this stage purchasing a new term life plan will be difficult due to your existing medical condition. In case you are able to acquire a new term plan, then the premium charged would be high. You may also have to go through medical tests and the waiting period for pre-existing illness has to be covered, again.
However, renewal of term life policy is not necessary once the policyholder reaches the retirement age. At this stage, people mostly pay off huge debts and the major family responsibilities like child education or marriage are already done.
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There are several benefits of availing term life insurance plan. The term insurance is one of the best types of insurance which guarantees the protection of your family. It offers a safety net to the dependents by providing financial assistance and a lump sum amount to take care of liabilities and debts. Listed below are a host of other benefits you receive by availing a term life insurance plan:
Considering the many benefits of availing term insurance, let’s take a look at things to consider while renewing your life insurance policy:
Points to consider while renewing the term insurance plan:
Employment: You might want to renew your term life insurance plan, in case you work in the private sector. People engaged in the private sector change jobs regularly for growth and better opportunities.
Availing a term life plan is great when making a job switch. On an untimely demise, the family is taken care of.
If You are Newly Married: If you are newly married, then you must consider renewing your term insurance to safeguard future of spouse. In case of any eventuality, your spouse receives a lump sum amount and can lead a financially independent life.
If You Have Debts: if you own a business or you have a long–term loan to pay off like a home loan; then you must consider keeping your term insurance up-to-date. The term insurance plan helps your family pay off existing debts; in case of any eventuality. The sum assured will be used to pay off the business loan or home loan; in case the policyholder dies within the policy tenure.
You Are a Parent: Once you become a parent, you must renew your term insurance to secure the future of your kids. You must renew your term insurance until your kids enter the professional world and start earning for themselves.
See Also: What is a Term Life Insurance Policy?
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