Agent Owner, Gilmore Insurance Services, Marysville, Washington State
Term life policies expire at different points in time, depending on what the policy states in it's declaration pages. Older policies may expire at age 70,75 or 80. The older policies ending that early reflected the life expectancy of the time when they were issued.
Newer policies expire around age 90 to 95 these days in most cases. Still a great question to ask if you are purchasing term insurance.
Co-Founder, TermInsuranceBrokers.com, Goldenzweig Financial Group, Las Vegas, Nevada
When you first purchased your term life insurance policy, one of the options you designated was the term length (10, 15, 20, 25, or 30 years) in which the premium would remain locked in place for and could not increase. At the end of the designated term length premium guarantee period, the policy will do one of two things:
1) the premiums will begin to increase each year by a substantial margin (based on age)
2) the premiums will remain the same, but the death benefit will rapidly decrease (this method is only used on some term policies that are issued on a universal life chassis)
What you will commonly see is the first method. For example, if you purchased a 20 year term policy and outlive the 20 year period, the premiums will start increasing in year 21. Since the premiums will keep going up and up, most people replace the term policy with a new life insurance policy (term or permanent - depending on need and age) to create a new premium guarantee period. Note - the new policy will feature a higher rate structure (for the same coverage structure) as your older and due to any changes in health history - to accommodate this, you can adjust the face amount or length of coverage to reduce the premium of the policy.
I hope the information is helpful - please feel free to contact me for assistance with your coverage and if you have any other questions. Thanks very much.
Co-Founder, TermInsuranceBrokers.com, Goldenzweig Financial Group, Las Vegas, Nevada
Term life insurance policies technically don't expire until age 90 or 95 (with most carriers). However, most people only keep a term life insurance policy until the term premium guarantee period expires (e.g. if you have a 20 year term policy, you're likely only going to carry it until the end of that 20 year period). When the term premium guarantee period expires, the policy structure will do one of two things:
1) the premiums will increase each year (based on age) by substantial margins, or
2) the premiums will remain the same and the death benefit will decrease each year.
Many people often review their term insurance policies well before the term period expires because they may want to replace the policy with a new one to create a new term period to secure low rates while they're young and healthy or change the amount of coverage they need to reduce their premiums.
I hope the information is helpful - please feel free to contact me for assistance with your term insurance coverage, including quotes and policy analysis and comparisons, and if you have any other questions. Thanks very much.
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
The expiration date of a term policy is written on the front of the policy. The premium is guaranteed for a set period of time and many people think that is when the policy will expire. The premium increase at the end of the term is many times the current premium. Continuing the policy is not going to be the chosen option very often. After the premium guarantee period the policy normally will renew every year at an increased premium.
When you purchase Term Life Insurance, you select a period of time, or "term", during which your premiums will remain the same, or "level". Most people choose term periods of 10, 15, 20, or 30 years. If the policy is guaranteed level, there is no chance that your premiums will go up, or your face amount will do down, during this period of time.
When that term ends, your policy may simply end, or most likely, the premiums will jump way up. That is because the guaranteed level term has ended. From then on, the premiums can go up each year until you hit a certain age, usually 80-90. At that time, the policy officially expires. But because the premiums go so high after the level term period ends, most people drop their term policies long before it officially expires.
That is a great question! Your term policy will state very clearly in the paperwork the end date of your policy. Most term policies fall in the typical 5 to 20 year policy category, but some, like AARP or AAA policies end the day you turn 80. Most people find it really, really tough to get insured at that point, so please be careful. Thanks for asking!
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Newer policies expire around age 90 to 95 these days in most cases. Still a great question to ask if you are purchasing term insurance.
1) the premiums will begin to increase each year by a substantial margin (based on age)
2) the premiums will remain the same, but the death benefit will rapidly decrease (this method is only used on some term policies that are issued on a universal life chassis)
What you will commonly see is the first method. For example, if you purchased a 20 year term policy and outlive the 20 year period, the premiums will start increasing in year 21. Since the premiums will keep going up and up, most people replace the term policy with a new life insurance policy (term or permanent - depending on need and age) to create a new premium guarantee period. Note - the new policy will feature a higher rate structure (for the same coverage structure) as your older and due to any changes in health history - to accommodate this, you can adjust the face amount or length of coverage to reduce the premium of the policy.
I hope the information is helpful - please feel free to contact me for assistance with your coverage and if you have any other questions. Thanks very much.
1) the premiums will increase each year (based on age) by substantial margins, or
2) the premiums will remain the same and the death benefit will decrease each year.
Many people often review their term insurance policies well before the term period expires because they may want to replace the policy with a new one to create a new term period to secure low rates while they're young and healthy or change the amount of coverage they need to reduce their premiums.
I hope the information is helpful - please feel free to contact me for assistance with your term insurance coverage, including quotes and policy analysis and comparisons, and if you have any other questions. Thanks very much.
When that term ends, your policy may simply end, or most likely, the premiums will jump way up. That is because the guaranteed level term has ended. From then on, the premiums can go up each year until you hit a certain age, usually 80-90. At that time, the policy officially expires. But because the premiums go so high after the level term period ends, most people drop their term policies long before it officially expires.