My term life is coming to an end soon. Can I extend it?

Asked by Amanda

2 Answers

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Hello Amanda,

Can you extend it? Not exactly. In other words, the term plan has a length of time where the premium and death benefit are level, and at the end of that term there is not a provision which amounts to extending that contract.

Look for the word “conversion” in your policy and you will see that “extending” the coverage amounts to your choosing to go to permanent coverage in order to keep your rate class and face amount as part of a policy from the conversion date, with the same carrier. Conversion involves no new exam. Permanent coverage would be in place to age 100 or beyond, and that effectively gets you out of the limits of the term plan. Permanent coverage can be Whole Life, Universal Life, etc.

Some important considerations: permanent coverage costs more than term coverage when looking at the same face amount. So, consider reassessing your needs if you choose to convert. Example: the reason for 20 years of coverage with term may have been a newborn - who is now leaving home after age 18. The coverage amount can be reduced when converting so that the lowered face amount comes at less cost than the initial face amount. If your 400K term policy needs to look like 50K of permanent coverage (matching a need that is only that large) then convert but reduce to that amount. The logic is that most of us don’t need 400K of coverage when we are 85.

Conversion can be expensive in the later years of a term plan (since you would be older then). For present day term purchasers, consider looking at a small permanent plan when you buy your term insurance rather than waiting until later. The small permanent plan starts when the term insurance starts, and when the term plan expires you have the permanent plan still in place so that it runs to age 100. This way, you can address both your temporary and your permanent needs right from the start when you are younger and pay the least to cover both.

| 12.11.15 @ 18:30
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$commenter.renderDisplayableName() — {comment} | 12.09.16 @ 13:58
Answered by Larry Gilmore, Insurance Agent in Marysville, WA
First you need to find out if the policy is ending or if just your level premium window is ending? If your policy is ending you may be able to convert it to another insurance product, but it will depend on the insurance company you're with now.

If your period of level premiums is ending (not the policy) you can continue the policy but at a much greater cost.

What you may consider if your health is still good, is purchasing a new policy. It won't be cheaper than before, but it may be lower cost to you than sticking with your current policy after the level premium period ends. | 04.15.16 @ 06:08
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$commenter.renderDisplayableName() — {comment} | 12.09.16 @ 13:58
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