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Can I extend the tenure of my term insurance plan?

dateKnowledge Centre Team dateApril 08, 2021 views231 Views
Can I extend the tenure of my term insurance plan?

When you are looking to secure your financial future and that of your family, an insurance policy is an option you may have come across. But that’s the easy part, the difficult part is figuring out which among the different types of insurance plans your situation calls for.

A life insurance plan that provides coverage for a specified period is known as a term insurance policy. If the policyholder dies during the period when the policy was active, the nominee(s) will receive the death benefit. Term insurance is not as expensive as a permanent life insurance plan. Term insurance does not have a cash value. The policies provide only a guaranteed death benefit.

Can you extend the tenure of your term insurance policy?

Yes, you can extend the tenure of your term plan. Most of the term insurance plans do not expire until the policyholder is 90-95 years old. At the end of the term of the policy, the initial term period ends. It means that the low premium the policyholder was paying for the policy ends. After the end of the pre-decided term (20 years or as the case may be), the policyholder can keep paying the annual premiums until the age of 90 or 95.

However, the amount to be paid at the end of each term will keep increasing. Thus, technically speaking, it is not possible to adjust the term. It remains fixed. However, in some cases, there is a possibility to change the term insurance period. The cases are-

Convert to a life insurance policy

It is one of the best ways to extend your term insurance policy. It is possible only if the policyholder had bought a convertible plan. There will be a clause for the same in the policy document. Additionally, such conversions can take place only after a specified time.

Auto-renewal of the plan

It is another scenario where the term insurance can be extended. The policyholder should have bought a term insurance renewal plan. In such a case, the policy will extend by another term until you attain a specific age.

The best part about a renewable policy is that you can renew it even if you are diagnosed with a medical disease. However, the premium which the policyholder will have to pay after the detection of the disease will be higher.

Term policy expiration at the end of the term

Different plans have different conditions. Most term insurance plans do not expire at the end of the specified period. Generally, they provide coverage till the policyholder is 95 years old. But the premium in such a case will be higher. The premium might increase yearly or after the end of a term, as mentioned in the contract.

One of the primary advantages of a term insurance policy is the high-value coverage provided to a policyholder at an affordable premium. In comparison to other life insurance policies, a term insurance plan has lower premiums. Another significant benefit is that the earlier you buy the policy, the less will your premium be.

ULIPs for planning your retirement

Final Thoughts

It is better to buy a term plan with the longest term policy if that fits your budget. If you have to meet some short-term financial goals, you may customize the length of the policy accordingly. You have to remember that life insurance is extremely situational and that is the reason Canara HSBC Oriental Bank of Commerce Life Insurance has a highly customisable term plan – iSelect Star. This plan allows you to increase the sum assured according to evolving life stages and needs. Apart from that, you can also add riders to the plan for enhancing it. It offers a whole life cover option that will insure you till you turn 99! If you are having trouble deciding on the length of the term plan, calculate your needs and find a plan as per your financial goals.

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Frequently Asked Questions (FAQs) for Term Insurance

This being a term plan doesn't offer any payout after maturity or expiration date.

Each insurance company has its own term insurance premium calculator. If you want to check out the premium quote, go for the iSelect Star term plan calculator. It gives a premium amount based on your age, gender, habits, education, and annual income.

You can purchase an iSelect Star term plan anytime between 18 to 70 years of age.

It depends on your needs. For example, if you want to cover a child's education or wedding expenses, you have to include them in your coverage. Your premium will be calculated accordingly.

If your key purpose is to give your Family financial protection, go for the term insurance plan. And if you want some savings, in the end, go for a traditional life insurance plan.

Go for at least 12 times cover than your annual income. Or you can go as far as 20 times coverage as per your needs.

The right time is when you don't have anything to keep your Family safe from financial storms, and they rely on you for financial needs.

If you are unable to make the payment or suffering from a terminal illness, a term plan pays a part of the sum insured to treat your disease.

Term insurance riders are attachment or endorsements made, while taking the term insurance policy, as a supplementary coverage to policyholders. Apart from the core death benefit, term insurance riders offer below-given additional benefits:

  • Accidental Death Rider When a person suffers from a terminal illness, his/her family ends up spending a significant amount in treatment and medical expenses. Accelerated death rider pays a part of the sum insured in advance to cover such costs and save the family from running out of cash.
  • Accidental Disability Rider If the policyholder can't pay the premium because of an accident or permanent disability, a sudden disability this pays the premium on behalf of the policyholder till completion of policy term or for a defined duration.
  • Critical Illness Rider If the insured person gets a heart attack, cancer, or any other critical illness, this rider pays a lump sum on valid diagnosis.
  • Premium Waiver Rider If the policyholder is unable to make payments due to income loss or disability, a premium waiver rider waives off all future premium payments. And the term policy remains active until the expiration date.
  • Income Rider: The rider ensures that your family receives regular income + sum insured in case of unfortunate demise of life insured.

Anyone can go for life insurance as it offers some savings after the maturity date, but it doesn't cover the protection of your family . The best term insurance plan is solely designed for taking care of loved ones if something happens to you. Term plans act as a shield between your family and sudden financial fall. They make sure that your family lives a healthy life even after you. With a little amount paid per year, you can be worry-free from the family's financial conditions.

Questions that you need to Ask while Buying a Term Insurance?

  1. 1. Amount of premium you have to pay based on your age, habits, education, and monthly income
  2. 2. The total number of benefits covered in the term plan. Do they include benefits that you care about the most?
  3. 3. How to save money on tax if you pay for the term plan?
  4. 4. Do they offer regular income options?
  5. 5. Can you change the coverage and premium in the future?
  6. 6. Does the claim consider valid if death occurs outside India?
  7. 7. Which kind of death is not covered by insurance?
  8. 8. Can NRIs take term insurance? If yes, what are the conditions?
  9. 9. Does the term insurance plan have a cash value if you decide to cancel the policy?
  10. 10. Under what circumstances can a term insurance plan be cancelled?
  11. 11. Can I pay the premiums online or make electronic payments?
  12. 12. What will happen to the term plan if the life assured starts smoking after purchasing the policy?
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