Renewable Term Life Insurance

Are you wondering about renewable term life insurance quotes? We understand the insurance industry can be confusing, so we’ll go over everything you need to know step by step. That way you won’t become buried under a renewable term policy landslide full of too much information. We’ll cover the basics and what you can expect, so that you’ll be able to research life insurance with confidence.

In the meantime, get started finding affordable renewable term life insurance rates in your area by typing your ZIP code into our helpful tool above.

What is renewable term life insurance?

In general, term life insurance is a form of life insurance that lasts a specific amount of time — the period known as the term. If the individual passes away within the term, their beneficiaries are paid a certain dollar amount based on the amount of coverage purchased. Renewable term insurance isn’t temporary coverage, though.

The renewable term life insurance definition is a term insurance policy’s clause allowing the coverage term to be extended for a set period of time without having to re-qualify for new coverage. Renewable term life insurance may be described as a clause in a typical term policy.

What sets a renewable policy apart is that it can be extended — hence, renewed. Renewable term life insurance policy can be renewed once the term expires; however, renewal is optional. You may also have a convertible term life policy, which would allow you to convert your policy to whole life insurance without answering health questions or getting a medical exam. Click the link to learn why your 30s are the best time to buy term life insurance.

The main renewable term life insurance advantages have to do with flexibility. Let’s take a look at a video further explaining the details of a renewable policy and other forms of life insurance coverage.

Keep in mind that term life policies have a set timeframe, unlike other types of life policies that offer permanent coverage. According to the Insurance Information Institute, the current most popular amount of time is a 20-year term. After that, you can expect your premium to rise. As you age, this type of life insurance policy will cost more to purchase and, often, more to maintain. Let’s take a look at a table showing how much you might pay for different terms.

In short, if you plan on having coverage for a long time, i.e. more than 10 years, you may want a permanent policy instead of going for term life coverage. Let’s see what happens to a term life policy once it ends.

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What happens to term life insurance at the end of the term?

At the end of the term, the coverage will end and so will the insured person’s payments to the insurance company. Should you outlive the term life insurance policy, those funds will have been forfeited, and there will be no death benefit.

Read More: What is level-term life insurance?

What is a 20-year renewable term life insurance policy?

Essentially, it’s a policy that is active for 20 years. The cost of your premiums and coverage amount will not change within that 20-year timeframe. This is currently a very popular timeframe for coverage. You’re entitled to a level premium as long as you maintain your insurance in most cases; these are known as level term life policies. It is possible for your coverage to be both a renewable term policy and a level term life policy.

If we haven’t answered all of your questions today, fear not, because we’re going to be wrapping up with an FAQ section.

Ready to buy renewable term life insurance? Type your ZIP code into our helpful tool below to find quotes for renewable term life insurance in your area.

Case Studies: Renewable Term Life Insurance

Case Study 1: The Young Family’s Financial Security

The Johnson family, consisting of John and Sarah Johnson and their two young children, sought a life insurance policy that would provide financial security for their family in the event of an untimely death. Being in their 30s, they opted for a renewable term life insurance policy with a 20-year term.

This allowed them to secure coverage during the years when their children would be dependent on their income. With the option to renew the policy at the end of the term, the Johnsons felt confident in their ability to adjust their coverage as their needs changed over time.

Case Study 2: The Business Owner’s Flexibility

Mark Thompson, a small business owner, wanted a life insurance policy that would provide financial protection for his family and business in the event of his passing. He chose a renewable term life insurance policy with a 10-year term.

As his business grew and evolved, Mark had the option to renew the policy, ensuring continued coverage for his family and the ability to adjust the coverage amount based on his changing financial circumstances.

Case Study 3: The Retirement Planning Strategy

Susan Anderson, a 55-year-old individual approaching retirement, wanted to secure life insurance coverage that would protect her loved ones and complement her retirement planning. She opted for a renewable term life insurance policy with a 15-year term.

This allowed her to have coverage during the years leading up to her planned retirement, ensuring her financial obligations would be met even if she passed away before reaching her retirement goals. With the option to renew the policy, Susan could adjust her coverage or explore other options as her retirement plans evolved.

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Do you have more questions about renewable term life insurance?

Now you should know what renewable term life insurance means, but if you still have some questions, keep reading. We’ll answer a few that are commonly asked below.

#1 – Can term life insurance be extended?

Most term life policies don’t expire until the insured individual reaches the age of 95. As long as you continue paying the premiums, the policy can be extended.

#2 – Should I convert my term life insurance to permanent?

For most people, with age comes greater financial stability. If you’ve reached a stage where you feel financially secure, it’s a good time to convert the policy to a more permanent form that can provide protection over your entire lifetime. This is an option with convertible term life policies.

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#3 – Can I cash out my term life insurance?

No, funds will only be transferred to the beneficiary in the form of a death benefit, and only if you die within the term of the policy. There is no cash value portion with this type of policy; that is exclusive to permanent life insurance policies, such as whole life.

#4 – Is term life insurance a good idea?

Only you can decide what kind of life insurance is best for your needs, but generally speaking, life insurance is important. You want to know your loved ones will be taken care of when you’re gone.

#5 – How long should I get term life insurance for?

It depends on your financial situation and how long you think a life insurance policy will be necessary

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#6 – How long is a term life insurance policy?

Different insurance companies offer different term limits at different premium rates. Usually terms are in increments of 10 years (sometimes five years) and 20 years is the most common term length.

#7 – Which is better, term life or whole life insurance?

It depends on your financial situation and your age. Some financial advisors suggest that term life insurance if managed properly is the better bargain when compared to a permanent life insurance option. Some won’t know unless they look at renewable term life insurance examples. Again, it depends on your personal circumstances, income, health, and what you feel is the best choice for you. The most important thing is to make sure that you can afford your premium payment. If you can’t pay your life insurance premiums, you could lose your coverage.

References:

1. https://www.iii.org/article/what-are-different-types-term-life-insurance-policies

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