Do you own a life insurance policy that is about to expire? Not sure if you should renew it or not? Renewing your life insurance is an important step you should consider seriously.
A life insurance policy is a contract agreement between an insurer and a policyholder. An insurance company will specify that if the insured passes away during the policy period, the insurer will pay a death benefit to the beneficiaries specified on the policy.
It’s challenging to consider, but if something were to happen to you, having a plan in place makes a massive difference to your family so they can sustain their lifestyle and not worry about paying off the mortgage or losing their home. Life insurance provides added security.
Still wondering whether it is worth it or not? There are great benefits when you renew your life insurance policy.
What Happens when a Life Insurance Policy Expires?
You can easily let the coverage lapse and continue on without life insurance. Some people choose this option, mainly if children are grown up and financially secure. There are enough accumulated assets to care for their spouse or partner. If your family still requires the financial security of life insurance, you then have three main options:
Extending your Current Insurance Policy
When the life insurance policy’s coverage period expires, you may have the option to extend the policy, depending on the individual policy and limits. Though you will not be required to have a medical exam if you extend your policy, the rate will typically increase each time it is extended due to your age.
Because of these increasing premium expenses, renewing a life insurance policy can often be an expensive method to meet your life insurance needs. Technically, you may generally keep renewing your coverage year after year until you become 95 years old.
Get a Different Life Insurance Policy
Imagine you are in excellent health, and your existing life insurance policy is set to expire. In this case, you might think about getting a new policy entirely. A medical exam is usually required when applying for a new life insurance policy. Furthermore, your premiums may be greater than those under your previous insurance because you are now older.
However, you may not require the same extensive coverage that you years ago. It may be worthy to browse around and compare premiums because they might differ between insurers. A life insurance broker can save you time by doing it all for you at zero cost.
Why is Renewing a Life Insurance Policy Important?
As mentioned previously, the renewal of your insurance policy allows you to prolong your coverage since the insurance company cannot refuse your insurance policy renewal if the option of policy renewal was included in the original policy.
Some people contemplate taking advantage of a policy’s assured renewability provision because it may be the only option to have life insurance if health changes. Suppose an individual has been diagnosed with a terminal or life-threatening illness. In that case, they may be ineligible for a new policy with a significant death benefit.
As a responsible adult, you should not be lazy when it comes to remembering to renew life insurance plans. Failing to renew will result in your insurance lapsing, and you will no longer be able to claim any benefits.
A life insurance policy also provides tax advantages which are useful when filing your income tax return each year. As a result, it is self-evident that if you fail to renew your insurance on time, the coverage will lapse, and no tax advantages will be available.
Furthermore, not continuing your insurance coverage has many more drawbacks than advantages:
- Defeats the purpose of purchasing insurance
- A longer waiting period
- It may get expensive
- Medical examinations
How You Can Renew
When you first take out a life insurance policy, you have the option of paying the premium in monthly, quarterly, or half-yearly instalments or one lump sum each year – all based on your financial resources.
When you stop paying your life insurance premiums, the policy becomes inactive, but it does not necessarily lapse immediately.
To reactivate your plan, the insurer gives you a grace period of 15 days if you pay the premium in monthly instalments. A grace period of 30 days is given if you pay the premium quarterly, half-yearly, or yearly. However, if you do not pay the renewal premium for your insurance, the policy will lapse.
To revive a lapsed life insurance policy, the policyholder must pay all outstanding premiums – from the date of the very first unpaid premium to the revive date. Interest on exceptional premiums and any relevant taxes and penalties is added on top.
The insurance provider may even request a medical evaluation again if the policy is revived in some circumstances.
What to Consider Before Renewing Your Life Insurance Policy?
When you renew your policy, consider how much and to what extent you want to safeguard your family’s future financially. Any significant life event may necessitate re-evaluating your life insurance policy.
Consider these things when you decide to renew your policy:
- Health Status
- Increased Tax Burden
- Change of Employment
- Purchasing a Home
- Becoming a Parent
It’s advisable for you to have a long-term plan to start off with as extending the term at a later date will be more expensive to do. When you have the right policy with extended coverage, you and your family can go ahead and enjoy a lifestyle of your choosing without having to worry about future uncertainties.
Prime Financial Solutions and Mortgages Ltd
If you are in a position to renew your life insurance policy and if you are looking at different options, contact us Prime can help you and save you lots of time in the process – telephone 01942 665 436:
- Life Insurance
- Critical Illness Cover
- Income Protection
- First Time Buyers
- House Purchases
- Self Employed and Contractors
- Self Build
- Buy to Let
PRIME – THE BEST UK BROKER SERVICES FOR LIFE INSURANCE & MORTGAGES
When you want to renew your policy we can help you to find the best possible quotes and options in the UK. With a wealth of experience we understand your needs. Finding the right life insurance can be a long winded time consuming process for you as you try to fit that into your daily schedule – we understand. You can search yourself or you can ask us to search for you and we charge no fees for doing so.
When you choose Prime, you’re choosing a proven transparent UK broker that works hard on your behalf to get you great choices, so you don’t have to navigate the landscape of life insurance we can do all the searching for you and provide unique solutions to match your needs.
At Prime we have an exceptional FCA approved team of life insurance & mortgage specialists who work for you from start to finish. Life insurance quotes and mortgage quotes are free. We provide excellent one to one services, and we make your time with us hassle free – and we do all of the heavy lifting so you don’t have to.
Prime is proud of the reputation it has built over many years, and this is largely reflected through the positive reviews we receive on a regular basis from customers in Wigan, Greater Manchester and across UK, in person, on Trust Pilot and Google online.
Perhaps there is something about renewing a policy that you don’t quite understand yet and you need a better understanding? Maybe you have more questions? Our dedicated team of FCA approved experts will answer any and all of your questions – just let us know.
We understand renewing a life insurance policy might not be an easy process for you and we’d love to help. Furthermore, if we can help you with further services so you can ensure your family is taken care of please let us know. You can find out more about us and what we do here and if you need help with anything else, Prime is at the end of the phone – we will help you. Click here to Get a Life Insurance Quote or use our quick contact form to get in touch. Our friendly dedicated team is available by telephone 01942 665 436 during office hours.