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Not long ago,American Life InsuranceGuidance Network released"2018Q3 U.S. Individual Life Insurance Market Report"The data shows that 21% of American consumers have chosenTerm life insuranceproduct.If you belong to one of them and bought term life insurance products many years ago, then you will inevitably face this problem.
Term Term Life Insurance Fundamentals
Term life insuranceInsurance types are products that provide protection for a specific period of time ("Term").The typical term life insurance coverage period is 10, 20 or 30 years.
Although the cost of applying for term life insurance is usually cheaper, this coverage period will eventually end.If the person who originally wanted to be protected (Beneficiary), in the next 15 to 20 years, economic protection is no longer needed, and it does not matter much after the term life insurance expires.
People usually think that after term life insurance expires, it has achieved the original purpose of insuring. After that, there may not be so much economic pressure or protection demand.
It sounds reasonable, but life often does not go according to plan.
7 question and answer tests before the expiry of Term
Now, your term life insurance coverage is about to end.The vast majority of consumers will also encounter this situation for the first time.At this time, we need to examine whether our living conditions have changed compared to before.We suggest you start by trying to answer these questions:
- Do you have dependents?
- Do you have large loans or debts?
- Are you in good health now?
- How is your daily budget arranged?
- What are your plans for the future?
- Do you want to leave assets to your children or others?
- After you pass away, are there any children who need special care needs?
Write down the answers to these questions on paper. If at this time you find that you now have more financial worries and obligations than before-then you still need life insurance.Here are 5 options to consider before your term life insurance is about to expire.
1. New purchase: buy another term life insurance
You can buy another new term life insurance policy.If allowed by the insurance company, you can update the current policy to a new one.At this time, because you have grown older, you need to pay a higher premium.
You need to submit proof of physical health and undergo a physical examination.If you are in poor health—for example, you have high blood pressure, high cholesterol, or other health problems—you may be denied insurance or face higher premiums.
2. Upgrade: switch to whole life insurance
Some insurance companies allow policyholders to convert term life insurance policies intoWhole life insuranceInsurance policy.There is usually a time window limit, or an age limit, and the policyholder must make this decision within this time window or within a certain age range.The insured amount of whole life insurance policies that come through upgrades may be limited.
The difference with whole life insurance is that as long as the insured continues to pay the premiums required for the policy to take effect, the insurance contract will continue.Part of the premium will go to the cash value account and accumulate over time.
3. New purchase: buy a new whole life insurance
You can directly apply for a new oneWhole life insuranceProducts to meet your new goals and budget.Usually you need to undergo a health check or telephone interview, but once the application is approved, as long as you continue to pay the required premiums, the insurance company will provide life-long protection.
Life insurance has a "cash value" account function. The "cash value" part will grow and accumulate over time. This money becomes a savings fund that can be used while the insured is alive.
4. Hybrid: Hold both term life insurance policies and whole life insurance policies
Term life insurance and whole life insurance, this is not necessarily a question of "choose one of the two".You can purchase a term life insurance to achieve a specific goal, while holding a whole life insurance policy.such as:
- Apply for a term life insurance to match the amount and period of housing loans or debts.
- Apply for a whole life insurance policy and pay extra for your quota and your children after your death.
- In the case of health, whole life insurance policies can continue to accumulate cash value.
5. Group insurance: apply for life insurance through employers or companies
Life insurance provided by employers or companies, usually called "Group insurance".It means to protect an agreed group through an insurance policy.The advantage of this type of group insurance is that if you are in poor health, you still have a great chance to be protected in this way.
Many employers will provide employees with a basic life insurance-usually the insurance coverage is the employee's salary for one year.The reality is that many employees don't even know that they have been bought this insurance, because this is an act of the employer to protect their own interests, and the premium is not deducted from your salary.
Employers usually inform employees that employees can choose to directly deduct part of their wages from their wages for additional insurance.
other suggestion
Accidental Death Insurance: Accidental Death Insurance
If your physical health deteriorates, you have not been able to apply for term life insurance and whole life insurance.Then accidental death insurance (Accidental Death Insurance) is an option in this case.Applying for accidental death insurance does not require a physical examination, and the premium is usually cheaper than life insurance.
This kind of insurance will only pay out when an accident occurs that causes the death of the insured person.No compensation will be paid for deaths caused by cancer or heart disease. These two causes of death are the most common causes of death in American society.
Another important suggestion about the above five options is that most insurance companies’ policies provide various types ofRiderTo choose from, some policy products even provideLong-term cares help.
With pension expenses and health issuesOverheadWith the continuous increase in the number of products, policy products that provide this type of long-term care assistance have become more popular.When the policyholder does not use or use up these benefits, the remaining part is usually automatically paid to the beneficiary.
Finally, if your term life insurance policy product is about to expire, you can also seek a professional life insuranceInsurance Financial AdvisorWith the help of new planning and insurance design, we can help you find products that can truly protect yourself and your family.
