What is a Renewable Term Insurance Policy? What is a Renewable Term Insurance Policy?: Consider the following scenario: When you were 25, you bought
What is a Renewable Term Insurance Policy?
What is a Renewable Term Insurance Policy?: Consider the following scenario: When you were 25, you bought a 20-year life insurance policy and paid the premium. You are now 40. Your term plan will lapse in the next five years. However, you want to continue this term coverage even after a period of 20 years.
For such needs, there is a renewable term insurance policy.
Renewable Term Insurance
What is a Term Insurance Plan? It is life insurance with death benefit only for the specified policy term. The renewable option in such term plans allows you to extend the same life cover / death benefit beyond the term of the original policy.
However, note that if you use the renewable option on your term plan, the premium will be rescheduled according to your age at the end of the original term; Which means, for the same coverage, you’ll pay a significantly higher premium during the renewal period.
If your term policy has a renewable clause, you should be able to calculate the new premium using your insurer’s term insurance plan calculator.
Eligibility for Renewable Term Insurance
You can only use the renewable term option in your term plan. When you are instant and up-to-date with your premium payments. This is the reason for the regularity of this payment. That the insurer considers it safe to extend your tenure beyond the original term.