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Key takeaways:
Life insurance renewal is an option for those with a term life insurance policy. This feature allows the policyholder to renew their policy when it’s about to expire so that they’re not left without coverage at the end of their term.
Guaranteed renewability has pretty much become standard on all term life insurance products. It allows you to renew your policy at a pre-specified price when it’s about to expire.
And you won’t need to go through extra underwriting or show proof of health, which makes this a great option for those who:
Still shopping for a policy? PolicyMe has some of the most simple and affordable critical illness insurance coverage. We also offer automatic yearly renewals at the end of your term, so you’re never caught without protection. Life insurance for seniors over 80 in Canada may also be of interest.
Renewing your life insurance policy can be a good idea if your health condition has changed and you still need coverage by the time your term ends.
But while having the option to renew can be comforting, think carefully when the time comes about whether or not you’ll actually need to make use of it.
Since you don’t have to go through extra risk assessment (underwriting) or do a medical exam, renewal premiums can be prohibitively expensive. They can clock in at a staggering five to 20 times the amount of the initial premium.
That's because in return for not asking for an updated picture of your health, the insurance provider takes a “risk” by insuring you, resulting in higher premiums.
Despite the price hike from your initial policy, renewing your life insurance might still be worth it for you.
So if you don’t experience a change in health but still need coverage by the time your term ends, you’re probably better off applying for a new policy.
Your rates will be more costly because you’re older, but clearing the medical exam should keep your costs well below the rate you would pay for a renewal.
What should you do as you get closer to your term insurance expiry date? Here’s a simple four step process to follow for deciding if you should renew your policy:
Keep an eye on the end date of your initial term life insurance policy. Because renewals with most life insurance providers are automatic, you’ll want to make sure ahead of time that you mark this date on your calendar.
A few months before your initial term ends, tackle the next steps below!
Routinely reassess your life insurance needs to understand how much coverage you need and how long you need it for.
When it comes time to renew, your life has likely changed and your financial situation with it. For example, if you’re at the end of your 20-year term:
Chances are slim you will need the same coverage you had earlier, if you still need it at all.
If you’re in good health and still need life insurance coverage, consider applying for a new policy, especially if your coverage needs have decreased over time. Here’s why and how to do it:
Evaluate Your Current Coverage Needs: Start by assessing your current life insurance requirements. If your financial obligations have decreased, such as your mortgage being paid off or children becoming financially independent, you might not need as much coverage as before. A new policy with a smaller coverage amount can be more cost-effective and better suited to your current situation.
Health and New Policy Benefits: If you’re still in good health, you’re in a favorable position to apply for a new life insurance policy. Insurance providers typically offer lower premiums to healthier applicants. This means you could secure a new policy at a fraction of the cost of renewing your old one, while still ensuring your loved ones are protected.
Make sure to cancel your policy before renewal kicks in if you no longer need protection.
Have you ever missed the cancellation date for a one month “free” trial that automatically rolls into a paid plan? Then you know how important this step is.
If you forget to cancel, the rates of your renewed policy might give you sticker shock on your next bank statement.
If you do need the coverage and have decided that renewing your policy is the right step for you, then kick back, relax, and let it renew – no action needed!
Additionally, if you're concerned about rising premiums or are looking for more affordable coverage, it may be a good idea to shop around and compare quotes from Canada's best life insurance providers. By doing so, you can find life insurance prices that work best for you.
Considering the needs of the needs of each individual within your household, a family life insurance policy may be ideal to ensure everyone's financially secure in case of a tragedy.
At PolicyMe, we know things can change (for better or for worse). That’s why we offer guaranteed yearly renewals on our term life insurance policies, so you can stay protected for as long as you’ll need it.
We’ll also let you know when you’re nearing the end of your term, so you can opt out easily before your policy renews. No surprises here!
Shop around life insurance quotes online through PolcyMe to get coverage tat keeps your family safe.
Rewing your life insurance policy can be a option to secure financial protection for your loved ones, there are even options like no medical exam life insurance that can make the renewal process easier and more accessible.
If you're not looking to renew, you may want to get couples life insurance. Find the best life insurance for seniors over 60 in Canada on PolicyMe. Use calculator for insurance to find out how much insurance you need.
