If you have a 10, 20 or 30 year level term life insurance policy nearing expiration, listen carefully.
… We could help you save your policy!
I know you have a lot of questions about your policy like:
- What happens when the term expires?
- Will I lose my life insurance coverage?
First, take comfort in knowing your policy may not be “expiring” at all.
… but even if it is, there are actually several options for saving or extending your policy.
In this article, we’ll teach you how term life insurance works, what happens at the end of the “level benefit period,” and reveal 5 actions you can take if you have an expiring policy.
With all the options we will show you below, I can honestly say that the most cost effective option 98% of the time will be to just get a new policy.
However, there are some instances where that option isn’t available.
Quick Navigation Guide
Use our guide below to navigate through your options quickly.
- First: Your Policy Probably Isn’t “Expiring”
- Why Premiums Increases After the Initial Term Period
- 5 Actions to Take When Your Term is about to Expire
- Companies Who Offer Reasonable Renewal Premiums
First things first, let’s clear the air on whether not your life insurance policy is actually ending, because, well… it’s not.
The Myth That Term Life Insurance “Expires”
Most term life insurance policies actually cover you to age 95.
That’s right:
At the end of your initial term, most term policies do not expire.
So it’s a misnomer to say your policy is “expiring.”
What’s actually happening is your initial level term period is ending.
What’s this mean?
It means your policy may not be ending at all, but the premiums will most likely be increasing every year moving forward on an annual basis, in most cases, to an astronomical amount.
Now, don’t get me wrong:
There is a such thing as renewable term life insurance.
However, almost all policies are renewable, and if you are unsure, you can just ask the insurance carrier or agent directly.
Renewable term life insurance simply confirms the term life insurance policy you have is able to be renewed without you having to go back through medical underwriting.
It’s really a great option if you end up being in worse health over time.
The problem is, there are only a couple of carriers, such as Lincoln, whose renewal premiums are not outrageous and Protective Life Insurance.
You’ll need to wait for your renewal of premium notice to arrive to find out what the adjusted premium will be.
Pro Tip: If you’re in the market for a new policy, be sure to consider one with Low Renewal Premiums!
Understanding Term Life Insurance & Premium Increases
Let’s say at age 40; you buy an annually renewable policy.
For insurance purposes, every year you live makes you a bit more of an insurance risk.
… So your premiums rise annually as you are one year closer to death.
Such policies are available, but they’re not very popular since the premiums go up every year.
They’re called annual renewable term (ART).
Let’s look at sample ART premiums for $1,000,000 in coverage for a male non-smoker.
ART premiums might look like this for the first few years:
- 1st year might be $250
- $265 in the 2nd year
- $275 in the 3rd year
- etc.
10 years later, your premium may actually rise to $450 per month for coverage! This example illustrates why people tend to shy away from this type of policy.
Most people would instead plan their budget around a fixed expense.
The result is, many insurance carriers offer level term life insurance policies.
In essence, they’ll cover you until age 95, but for 10, 15, 20, or 30 years the premium is fixed.
Calculating Level Term Premium – It’s a Simple Average
To determine your level premium, life insurance companies add up the payments for each year in the 10 year term and divide it by 10.
Mostly, 10 year level term life insurance is the average premium for the first 10 years of coverage.
From year 11 up, or in the case above, from ages 50 – 95, it reverts to an annual renewable policy.
It’s essential to lock in for as long of a level term as you think you might need for coverage. In a nutshell, once the level term is up, your premiums will skyrocket.
5 Actions to Save Your “Expiring” Policy (PLUS 2 BONUS OPTIONS)
Most policies offer several options when the initial term is about to expire:
- Replace the Policy with a Cheaper One – If you’re still healthy enough to qualify for a new term policy, consider doing so. It’s likely the new policy will cost a fraction of the renewal premium payment. Click here for a replacement quote.
- Convert the Policy – Check the policy’s conversion features. You may be able to convert the policy to a permanent policy without evidence of good health. If your health has deteriorated since the term policy was issued, this may be a good option for you. See notes on term policy conversion here.
- Pay the Renewal Premium – If you can’t afford to convert your policy or replace it, then you might consider paying the renewal premium. You’ll have to take your health and estimated life expectancy into account, as well as how long you will need coverage. If you’re healthy and need it for several years, it’s probably best to buy a new policy.
- Decrease Your Death Benefit – Many companies allow a one-time decrease in face value to your policy. The result? A reduction in your premiums.
- Sell Your Policy – If your policy is still convertible, you may be able to convert the policy and then sell it. It’s called a life settlement. If your health has deteriorated, this could be a particularly lucrative option for you.
BONUS OPTION #1
Let’s say you decide to reduce your death benefit or pay your renewal premiums.
… there might STILL be a way for you to save some money.
Has your health improved since you first bought your policy?
Perhaps you lost a lot of weight or stopped smoking, for example.
If that’s the case, most carriers allow a one-time application for a “health re-classification,” in which they essentially reclassify you based on your current health and lead to an immediate reduction in your premium.
BONUS OPTION #2
Option 6 – Let Your Policy Lapse – If none of the 5 options above work for you, or you can’t afford your policy or no longer need it, just stop paying premiums and the policy will lapse.
The insurance company can’t “come after you” to pay. You’re not “obligated” to pay for the duration of the full term length.
It’s simple.
If you stop paying your premiums, all that happens is your policy will lapse, and you’ll no longer have coverage.
Looking to Replace Your Coverage? Try These Companies!
In most cases, the increase from the level term premium to the renewable premium is outrageous.
Since most policyholders originally bought an affordable term life insurance policy, you can bet they’ll be in for a surprise when they open up their renewal letter.
Premiums have been known to increase by 6-10 times the cost of the initial payments!
Below is an illustration of guaranteed premiums on a term policy:
Luckily, I’ve found a few surprising exceptions to the rule!
These policies are offered by Lincoln Financial Group (LifeElements), Protective Life Insurance, and Fidelity Life Association (Graded Death Benefit).
*Please note these comments are valid at the time of writing this article and are subject to change.
Lincoln Financial Group
Instead of raising the premium, at the end of your term Lincoln lowers the death benefit to approximately half the initial value.
Your payments are guaranteed to stay the same for at least a few years after expiry of the initial term.
Then the guaranteed premiums marginally increase, by approximately 5% per year, for the next several years.
Below is a sample illustration of the Lincoln LifeElements guaranteed premiums of a 10 year term policy:
Fidelity Life Association
Fidelity Life Association offers a type of graded death benefit life insurance.
The best part?
The premiums are guaranteed to stay level for the life of the policy.
- 10 year term: until age 80 or for 20 additional years, whichever is longer ;
- 20 year term/30 year term: until age 80 or for 25/35 additional years, whichever is longer.
Like Lincoln, Fidelity also decreases the death benefits in the following manner:
- At year 11, 21 or 31 whichever is applicable, there is a one-time decrease in the face amount based on the original issue age;
- 20-29 years old to 80% of the original face amount;
- 30-39 years old to 70% of the original face amount;
- 40-49 years old to 60% of the original face amount;
- 50 years old and up 50% of the original face amount
Renewal Companies Conclusion
Both companies offer affordable premiums after the initial term expires.
In this case, you can actually afford to potentially keep your policy, as opposed to having to drop it.
More on Lincoln Pricing
Lincoln’s term policies aren’t the most affordable among the low price leaders in term coverage, such as Banner, SBLI, or Transamerica.
The premiums quoted are typically 10 – 20% higher, but they have a superior renewal benefit; which makes the increase in price a bit more palatable.
Let’s say you’re shopping for a 10 year term, but you might need insurance for up to 15 years.
You don’t want to pay for 15 year term up front because you probably won’t need it that long.
Buy the 10 year term from Lincoln, and your problem is solved. Don’t forget, coverage is reduced in year 11!
More on Fidelity Pricing
Fidelity is unique, as their product is designed for people with serious medical issues.
Someone with a history of cancer, stroke, epilepsy, alcohol/drug abuse, or extreme obesity may still be able to qualify for their graded death benefit.
To give you an extreme example, a man who is 5’11 could weigh up to 428 lbs and still be approved.
That same individual could also have had a heart transplant and lung cancer three years ago and assuming no treatment was necessary for the past 2 years, may still qualify!
Contact Us Today!
There are many options available when your level term policy is nearing expiry.
Be sure to speak with a knowledgeable agent about your ongoing insurance needs for the best advice for your unique circumstances.
At Huntley Wealth we have over 10 years of experience finding life insurance for people from all walks of life, and we would love to help you.
Our number is 888-603-2876. Give us a call, or you can get a quote using our quote form on the right.
*While we make every effort to keep our site updated, please be aware that "timely" information on this page, such as quote estimates, or pertinent details about companies, may only be accurate as of its last edit day. Huntley Wealth & Insurance Services and its representatives do not give legal or tax advice. Please consult your own legal or tax adviser.
Hi ,my mom is 67 and has a 20 yr term MetLife insurance for 250k and her anniversary date or when it’s up for renewal is June 5, 2017 but we just found out may 10,2017 a month before expiring she has lung cancer I guess they won’t renewal it now ,should I keep making payments event it increase drastically after june for insurance benefits just in case it covers or should I see what life insurance cover her now with cancer ,what should we do?
Hello Nelson,
I am so sorry to hear of your mother’s recent diagnosis! That sucks! I expect that the policy will continue to be fully inforce as long as you continue to make the premium payments they require of you. Unfortunately, those payments are going to go way, way, way up, not because of her diagnosis, but because that’s what they do at the end of a term period. This policy may be CONVERTIBLE however, to a permanent policy without need for additional medical underwriting. This would be perfect, since they would use your mother’s original health rating, and will not ask any medical questions. You should call the agent, or MetLife directly to find out if her policy is CONVERTIBLE to a perm product. Then ask if she can convert it (or part of it) to a perm policy, and get quotes. It will be a more expensive policy, but with her recent diagnosis, you can take less coverage and at least still have coverage. Or, keep paying on that term product if offered the opportunity. Good Luck to you both!
I am so very sorry about her diagnosis! You may have a couple of good options that will keep her coverage in force, despite her cancer diagnosis! One is to keep the term policy by paying the new premiums, even though they are high…if you can afford them, they will continue her coverage without any need for additional medical questions or approval. Alternately, you can look into possibly CONVERTING the term policy into a Perm policy, which means she has no medical questions nor medical underwriting, and will keep her original good rating. Call the carrier to find out if conversion to a perm policy (without medical underwriting) is an option, in which case they will give you pricing to make your selection. Good luck to you both!
My father-in-law purchased a small $5,000 term life policy from AARP many years ago and continued to make payments throughout his life. He paid his premiums every six months, was billed and paid in February of this past year (2017), turned 80 in March, which it seems would have been the end of the policy, but was then billed again in August for the next 6 months of coverage when he was most definitely 80 years of age. The policy billing said that was for coverage from the end of August to February of 2018.
My father-in-law recently passed away and I am wondering what we will be faced with when trying to collect on this policy? The insurance papers clearly say it ends at age 80, but they continued to bill him, he paid and they accepted that payment and provided a payment confirmation number, well after his 80th birthday. Going through his papers, I see no evidence that he was offered the opportunity to convert the policy to a whole life policy, nor notice that the policy ended on his 80th birthday, which would have been more obvious had he not been billed after his 80th birthday, as well as for a full six months one month prior to his 80th birthday.
Any suggestions as to how to approach this and not be shot down from the start?
Hello there,
I’m so sorry for your loss – but glad he did such a good job keeping his life insurance in force. I don’t know this policy, but the fact that he paid premium (and it was accepted) beyond his 80th birthday is certainly enough to file a claim…just try it and see what happens? I don’t think there is any one way to go about it, and at the least, they should be made to return the premium payment…but if you can get them to make good on the policy, all the better… it might be worth a call to an insurance attorney, as well…good luck to you
I have a term life insurance policy for $150,000 to age 95 – convertible through twentieth policy year, or to age 70 if earlier – purchased in 1991. The convertible date has passed. The premiums are extremely high and I am wondering if I have any options to still convert this policy.
Hello Ray, I am so sorry, but no. If you have passed the 20th year, or have reached age 70, then it cannot be converted. However, convertible policies can be awfully expensive, just because of the price gain due to age, so if you would like me to run you some quotes, based on your current age and health situation, I would be happy to see what we can do for you. Just email me at my direct email, and we can discuss privately. Thank you, and good luck!
Hi, Im in my 30’s, married, 1 child, have a 100,000 whole life policy and trying to decide if it is better to surrender for 5900 cash value and invest it or do a reduced paid up quote and have $33,000 whole life forever that I don’t have to pay into again.
I also have a 500,000 – 30 year term as well
My concern is that after my 30 year term is up (will be about 65 then) what will I have to cover expenses like burial or misc expenses later in life or what will I have to pass on to my family. What do people do for security after term is gone? Do they save and invest to have money for later to work from. In your opinion, Should I do the reduced payed up quote and let the insurance company have the $5,900 so I can be guaranteed 33,000 whole life to leave for my family or take the cash value and start investing and build my wealth/savings and burial expenses/ money to pass down to generations later in life can come from that. I know burial insurance is out there for later in life but unsure of direction to go?
Hello Carmine, As you have learned, a whole life policy simply doesn’t hold up over time – which is why we don’t even sell them ourselves! I hate to see our new clients with policies they have paid into and now have lost value…what a shame! So, since you do still have cash value (which will undoubtedly evaporate over time) I would agree you should indeed consider using it for a GUARANTEED lifetime policy that you won’t have to pay into ever again. That can absolutely become your lifetime final expense policy, so even after you have outlived your term policy, there would still be $33,000 for final expenses. I say GUARANTEED however, because only a GUARANTEED death benefit is one that will be there 50, 60, 70 years down the road. You are still very young, so you could take that $5,900 and do whatever you want with it… As far as your question, “what do people do after term is gone?” Well, most of them still need insurance and even if their kids are grown – they may have a new mortgage, or other expenses, and so are usually looking for another $100,000-$200,000 in lifetime coverage, which they can obtain in their 50’s, 60’s and 70’s.
I have a $100,000 term policy. Renewable to age 95 with premium change provision. Convertible to age 65. Oops, I am now 69. Decreasing term insurance option avail within 60 days before any policy anniversary after the 20th year. Policy purchased August 13, 2000. So does that mean this policy will no longer be in effect after August 13, 2020? I’m so confused!
The policy is stating it expires in 2042, so now I’m doubly confused!!
This insurance company no longer sells life insurance. I don’t know what to do.
Well, Barbara, let’s not panic yet! If this was a 20 year term policy, then the premium you are paying should remain constant until 2020, at which time the insurance company will probably offer you a renewal at a higher premium. However, we will need to discuss this in more detail to be certain of the finer points, especially since this company no longer sells life insurance. Please email me directly so we can get you the information you need to sleep easy at night! Thanks for this great question! Kim Ely, [email protected]
My mother died 3 years ago,and the will is still in probate. She had a $10k Life insurance policy at the time of her death, age 92. The executor is unreachable, and the heirs have no access to any of her finance papers,bank accounts ect.How can I find the policy or if it was paid out at age 90?
Hello David, Are you the beneficiary on this policy? If so, you need only contact the life insurance company and tell them you wish to make a claim upon the death of your mother. If you are NOT the beneficiary, I am afraid you will not likely get any information out of them. Good luck!
I have a term life policy on my Mother which is in it’s 4th year. They have an option for me to “surrender” the policy for cash value. I have not asked what that value is. What is that typically? How long before the policy expires do they usually allow you to surrender it for cash value?
Hello – every policy is different…some do have a cash value, but most do not. Surrender means you give up the policy for the surrender value…you can contact the carrier to find out what the surrender value is at this time. Please bear in mind, that the policy will end if you accept the surrender value, so you will have NO death benefit when your mother does pass away…Good luck!
Hi I’m 37 this year and thought that life insurance was something I needed to set in place as a lone parent to my 19 and 15 year old kids. I am currently very healthy and no health issues at this time but wanted the peace of mind that my kids had some money left for them for their future. I’ve only just had the phone call conversation today paperwork to follow. I’m paying over 20 years but I will only be 57 when it ends. And forgot to ask the question of what happens if I’m still alive and kicking with my payout of £150,000 ?
Hi Tina,
I’ve forwarded your information to Justin Nelson to help you with your insurance needs
Can I get life insurance after a strokeI’m 42
Hi Lynda,
If you are in the U.S. please give us a call us at 888-603-2876. We will need to find out more about your medical history. Our agents always do their best to assist you with your insurance needs. We would be able to assist you when/if you are in the U.S.
My 15 year fixed term life insurance on myself and my partner ended last year, I could not afford the renewable payments as they went up 7 fold,,,, I’ve just realised the company has continued taking my payments every month so am I still insured?
If you have been making payments and have proof of the payments. I would say, Yes. I also urge you to contact your carrier immediately and inquire on the status of the policy.
My question is: I have a term life insurance with Globe Life. My Insurance amount is $10,000.00. My term expired at 99 years old. If I live beyond that date and will not renew the insurance, will the company pay me the amount of $10,000,00 or I will lose it? Thank you for your answer.
Hello Tinh, We don’t actually sell GLOBE insurance, so I cannot speak with authority about their products, however, if your policy states that coverage lasts to your age 99, and you outlive age 99, then I expect your policy will NOT pay out any death benefit, nor return your premiums. If I were you, I would call GLOBE at 877-577-3860 M-F, 7:30-5:30 CST and find out. And, if they don’t cover you past age 99, and you want a true lifetime policy, give me a call at 619-507-8148, or drop me an email, and I can help you. We carry a number of products that will last as long as you live, even if you live to be 121 or older! Good Luck!
No conpialmts on this end, simply a good piece.