Is it Possible a Renewable Term Life Insurance Policy can be Renewed? This depends as it can provide financial safeguards in the years leading up to a significant personal milestone, such as marriage or having children, and after that, your coverage requirements might shift. But there’s more; just stay put to get the tricks.
But then, is it possible that a renewable term life insurance policy can be renewed? Yes, this term policy provides the insured with the option of extending coverage for another term, generally without taking a new medical exam or applying again.
Premiums, though, will increase every time it is renewed as the insured grows older. Important features of renewable term policies: This element allows the policyholders to adjust the cover as circumstances change or there is a need to change.
How does this Work?
Annual renewal options (every year) can be present in some policies, while others allow renewal for the same period as the original policy (e.g., renewing a 5-year policy for another 5 years), according to Western & Southern Financial and Progressive.
Term insurance is an insurance policy of life that expires at the end of a particular period of years. The term life insurance policy can be revived after the expiration of the term. The term may be as brief as one year.
Typically, you’re able to renew the policy without having to retake a medical exam or requalify. But then, the premium may rise annually or every few years as you age.
What is Renewable Term Life Insurance for?
Renewable term life insurance is designed to allow younger, healthier people to be able to purchase the lowest available premium currently available for their age and health at that time and establish a vehicle for maintaining insurance coverage year to year.
This will generally make a better short-term policy. For most shoppers, purchasing a 10- or 20-year policy with a guaranteed premium rate (a level term life insurance policy) will typically end up being less costly overall.
How does Renewable Term Life Insurance Function?
Your initial premium with a renewable term life policy is determined based on your current age and health and the size of your desired death benefit.
A renewable term clause is when you can renew the policy at the term’s end, typically in one-year increments. While your premium will go up based on your new age, you will not be required to take a new health evaluation.
When to Buy a Renewable Term Life Policy
When you are alive and young, the cost of a yearly renewable term life policy premium will most likely be less than other policy options. That is because there is a lower chance for you to pass away in your present year of living.
As you age, your premium will go up every time you renew. At some point, it will be better to purchase a level term life policy.
A 10, 15, 20, or 30-year level term policy will guarantee a premium for a longer number of years. Have a look at the level term life policies offered by Fidelity Life.
The most obvious benefit of a renewable term life policy for healthy young people is an extremely low premium. Although a level term life policy is generally an inexpensive one, there are specific circumstances in which a renewable term policy can be worth considering.
If you are finishing graduate school or a professional degree and anticipate taking a job that offers life insurance, a renewable term life policy will provide several years of coverage.
Then, once you have the resources (and financial need) to pay a greater premium and replace more income, you can purchase a longer-term policy or a permanent policy.
If you are considering getting married or having a family sometime soon, but not just yet, you can begin planning for the financial future of your family with a renewable term.
When you are married or have a child, your life insurance needs must be substantially changed. A renewable term life policy is an interim period between youth and a professional career or having a family.
Bottom Line
A renewable term life policy could meet your immediate needs. The premiums will normally increase with renewals, though. Your long-term plan could be to shift to a level term or permanent policy. The sooner you are doing this, the more likely your rates will be lower.
Level term premiums are less costly than people think. You may be in a position to buy a level term policy today and have financial protection for 10, 15, 20, or 30 years at a premium that suits your budget.
See what Fidelity Life term products are available, or contact one of our life insurance agents to learn more about your options.
Similar to a level term life policy, you can add different riders to increase your renewable term life policy to increase the death benefit or disability coverage for inability to pay premiums if you want. Additional information regarding life insurance riders.
