Life insurance is a touchy subject for most people because nobody wants to dwell on the thought of dying and leaving their loved ones behind. Nevertheless, life insurance is a legal agreement between the policyholder and the insurer to pay a certain sum, i.e., the insurance benefits to beneficiaries named in the policy, to ensure they remain financially secure even after your death. However, what happens if you outlive your life insurance? This article contains answers to that. Read on to know more!

What if You Live Beyond Your Permanent Life Insurance Plan?

Permanent life insurance, also known as whole life insurance, is adequate throughout the policyholder’s lifetime as long as premiums, i.e., the monthly rates, have been paid. Thus, it does not expire and remains active throughout the insured lifetime or until it is canceled. When you outlive permanent life insurance up to 100 years, the insurer terminates the policy and pays the cash value in full to the policyholder.

 What if You Live Beyond Your Term Life Insurance Policy?

Term life insurance provides insurance coverage for a short while, usually between 5 to 30 years. Unlike the whole life insurance, term life expires at the end of the period. It is purchased with the mindset that the dependent will be independent by its expiration, which is not always the case.

When this policy expires, or if you outlive it, nothing happens. The policyholder is usually notified about the policy coming to an end, and they stop paying premiums. The policyholder can either buy new insurance or convert to whole life insurance if they feel there is still a need for insurance. Mostly, it is advisable to convert to premium insurance (permanent insurance) so that the named beneficiary receives the death benefits.


What if You Still Need a Life Insurance Plan?

You may need to renew or convert your term life insurance if

  • You still have dependents relying on you financially
  • There are not enough savings to cater for death expenses
  • You are paying off loans

However, whether or not you truly need it depends on your ability to support your dependents financially when you die. To avoid the insurance gap, policyholders are advised to quickly decide the following line of action, usually 6 months before the expiration.

When You Do Not Need Another Life Insurance Policy

If you are sure you no longer need term life insurance, i.e., you’ve repaid your loans and have enough to cater for your dependents at your demise, you can choose to let the policy expire without renewing it. However, doing so will not let your beneficiaries be entitled to a death benefit.

You cannot cash out from a term life policy unless you purchase premium term life insurance. Generally, it is not advisable due to the cost. Truly nobody likes to pay for what they will not use, as in the case of term life, but on the bright side, your loved ones have the certainty of financial protection when you die.

Whether you purchase a term life insurance or a permanent one, it does not change that everybody has a risk they want to cover, especially when family members and loved ones are at the receiving end of that risk.

Regardless of the type of life insurance policy you want, Randy Jones insurance has got you covered. Contact our team of insurance experts to get the most affordable life insurance plans customized to your preferences.