The term insurance quotes we offer come with two types of premium provisions: guaranteed and non-guaranteed. The first allows you to choose a term period of 5, 10, 15, 20 or 30 years. During this term, the premium is guaranteed to not increase or decrease.
The second, less expensive one also allows you to choose from the same term periods of 5, 10, 15, 20 or 30 years. However, Unlike the guaranteed level premium policies, the premium is subject to change before the term of the policy expires. For example, you may have a 20-year term policy where the rates are projected to remain level for 20 years, but are guaranteed for only 10 years. You should be aware of these provisions before buying such a policy.
When trying to decide which term period is right for you it is important to know your options. You can always apply for a new term insurance policy after your term is through. At the end of your policy, the insurance company will contact you to tell you that the policy is about to expire. At this point you have three options.
Option 1- New Policy- Depending on your age and health, you can apply for a brand new policy with either your existing company or a new company. The new policy will simply replace the former policy. You must be careful when doing this because new underwriting requirements must be met with a new policy. Be sure to keep your old policy in force until you know the outcome of your new application. If your health has deteriorated you might face extremely high premiums, or even worse you might be refused coverage.
Option 2- Keep your existing policy- If you know your health is bad, you can continue paying on the existing policy after it expires. It will automatically continue as an extension of your existing policy. The good part about continuing a policy is that you will not need to provide medical evidence of your insurability. The downfall with this option is that the policy typically becomes annually renewable. This means that each year after the guaranteed term period has finished, the premiums will begin to increase substantially every year.
Option 3- Convert to a Permanent Policy- You can convert your policy to a Permanent Life Insurance policy and lock in your premiums at a higher level for the rest of your life.