Many may not know that a life insurance policy also expires. So the crucial question arises when the policy expires, what happens to premiums?
The policy terms and conditions are agreed upon by both the parties and when the time ends then all the premium is paid back. But what if you outlive your policy term? In this case, your life insurance ends and all the premium paid, or payout gets obsolete.
Whether you should renew the policy or not?
If your health remains poor then the smart decision would be life insurance renewal. When you renew your policy you are guaranteed the coverage but on the higher rates as
The insurer is now risking their premium because you are closer to the end of your life. Renewing your life insurance policy after ten years is beneficial for you but riskier for the insurer.
In case you want your premiums back even if you outlive your policy then one must opt for an exceptional life policy which gives ROP which is the return of premium. In it, you will have to pay higher than the regular rates. Other than this, there is no exception and if you outlive, your payout is cancelled.
Do you think buying a life insurance policy is a necessity?
Now, primarily it depends on your choice, but depending on the financial and household situation you need to wisely make decisions. When you are not available for your family and could not shield them in any way, then your term insurance is the only blessing that they will cherish. Majorly you are protecting them from financial problems. This security is necessary.
Moreover, you can not get free by buying the term insurance instead you need to be regular with your payment of premiums. If you are irregular with your premiums or do not pay them then the term insurance will collapse. After making the wise decision of buying a life insurance policy, it is essential to maintain the premiums to ensure financial security net for the family.
Essential reasons for the renewal of life insurance policy
Set the seal on family financial security
The primary objective of buying a life insurance plan is to create a financial security net for the family in case of an unfortunate event of death. But if you outlive and your policy expires then all your planning goes to vain and your purpose remains unfulfilled. To clinch on to continuous financial security, you need to renew it. Unfortunate demise brings bad times but having financial security is a blessing for them. So keep in mind the objective and life insurance renewal is a smart decision for betterment.
Reap complete benefits of the policy
Life insurance policies are inflexible and work on the simple principle of covering all the financial expenditure after demise but if outlived then losing on all the premiums you have paid. It has no saving element but complete risk cover. When you think of not renewing your life insurance policy then you are failing to fulfill your primary goal of securing your family. Renew your policy on time so that you can reap all the benefits of the same.
Earlier the better for optimal premiums
Whenever you purchase life coverage, the insurance agency thinks about your age, ailment, way of life, orientation, weight, and so on, before deciding the charges. Your smoking propensities likewise influence your term plan expenses; nonetheless, that doesn’t mean you can’t have a strategy. Assuming you purchase a life insurance policy at a youthful age and in sound wellbeing, you get lower charges due to low risk. In case you neglect to restore your term plan, you miss out on the low expenses and miss the advantages of the past charges paid. Further, if you are planning to buy the life insurance plan at a later age in life then the insurer will be at greater risk as your life would be closer to death and therfore you would have to pay higher premiums. Having the same insurance for higher premiums is vain and therfore earlier the better.
No need for medical examinations in the renewal of the policy.
Instead of buying a new insurance policy instead of a life insurance renewal, is a bad decision as you will have to start all over again. With a new insurance policy, you will have to undergo medical tests and all the other formalities. So without any hassle of medical examination, opt for the renewal of an earlier life insurance policy on time.
Life insurance policy results in tax benefits
If you buy a life insurance policy then the government exempts you from the tax of the amount of 1.5 lakhs. It is mentioned under section 80C of the Income Tax Act, 1961. Premiums get qualified and tax exemption is done. If you do not renew your life insurance policy then you lose out on tax exemption.
In final words – Life insurance renewal fulfills your primary objective in a hassle-free way. The renewal of policy is an effortless and quick process. If you have not purchased a life insurance policy yet then don’t wait, go for the best insurance policy according to your preference.