Term insurance plans are not like your traditional insurance plans that provide life coverage throughout your lifetime. As the name suggests, term insurance will offer life cover for a specific tenure, which indicates that it comes with an expiry date. However, before we speak about the features and benefits of this policy, let us first understand what is term plan.
A term policy is a pure and essential type of life insurance that provides high life cover at a pocket-friendly rate for a particular duration. Suppose something unfortunate happens to the policyholder within the policy term, the insurer is liable to pay the sum assured or death benefit to his or her nominees.
Term insurance is not like your conventional life insurance policy, where can you get maturity benefits if you survive the tenure. You can get maturity benefits in a term insurance policy only if you have purchased the plan with the return of premium option. If you have enough assets or if your children are well-settled when the period of your policy is expiring, you can let go of your policy. If you still feel that your family will need financial security after your absence, you have three options. You can:
- Extend the term of the policy
There are many term insurance plans available in the market today that allow the policyholder to increase the tenure of the policy. Besides this, these plans may provide the facility to raise the death benefit and coverage. Here, you may not have to undergo any medical tests and the tedious paperwork all over again. However, the premium of your policy will rise if you extend the term. The reason behind this is that the mortality rate increases with growing age. While many people may prefer considering this alternative, other policyholders may not think of this as a worthy option.
- Renew your term insurance plan
It is one of the most feasible options to choose when your term policy expires. Today, insurance companies let you renew your term insurance policy on maturity. The insurer may terms and conditions on the new tenure. Some insurers may require you to undergo medical tests, to ascertain whether you are not suffering from any disease or medical condition. One of the best things about the renewal of your term insurance plan is that it can safeguard the financial future of your family for a few more years. If you are considering renewing your term insurance plan on maturity, then you should do so immediately. It is because many insurers only provide a 30- day period within which you can renew your term insurance policy.
- Purchase a new life insurance policy
You can also consider buying a new life insurance plan that can meet your current aspirations. It is because the old policy that you had purchased years ago may not be an ideal choice to meet your financial goals. Here, you can seek the help of the term insurance calculator to find a suitable policy that can meet the family’s requirements, especially when you are no longer around. A term plan premium calculator is available on the insurer’s website. You can use it and determine the approximate cost in no time.
Now that you know what you should be when your term insurance plan is about to mature, it is recommended that you take action at the right time. Making the correct move will ensure that you are insured at all times. You can lead a peaceful life, as you are confident that your family will be financially protected in case of your unfortunate absence.