What Happens When Term Life Insurance Matures?
Comments
3 responses to “What Happens When Term Life Insurance Matures?”
-
Term Life Insurance doesn’t “mature”… It terminates – expires – ends. When a term policy ends, that’s it. No more insurance. If you live longer than the policy the insurance company keeps what you’ve paid and usually will offer to sell you another policy. At much higher rates of course as now you’re older than you were when you bought the first policy. And of course you will have to qualify again by taking another medical exam and being young enough to be insured.
-
Term life insurance does not mature because term life insurance does not have cash value. Policy maturity means that the cash amount equals the face amount (the policy endows) and/or the money will be paid to the policy owner as designated in the policy contract. Term life insurance cannot endow, and there is nothing in a term contact that says money will ever be paid out. An exception is ROP (return of premium) term life insurance that will return the premiums paid in when the term expires, per policy contract.
-
Term life insurance is temporary coverage, although many term life contracts have conversion options, generally time sensitive, in the policy. When a term life insurance contract expires, the coverage ceases. It’s important to match your financial liabilities and future obligations to the appropriate coverage period and have an understanding on the conversion provisions of the policy.
Leave a Reply
You must be logged in to post a comment.