What happens when you Life Insurance policy expires depends on the type of policy and the event.
If the policy expires because it is reached the end of contract and there is no option for renewal, the policy end. For example term policies usually expire at a specified age. You usually have an option to convert to a permanent policy sometime before the expiry date.
If you mean by expiring going out of force because of non-payment you, if you are healthy you can often reinstate the policy by payment of back premiums. Some policies have a cash value that is paid when the policy expires or matures. The policy wording would specify.
If you have any questions, or feel that I could be of asssitance, please do not hesitate to contact me.
Generally, when people ask about their life insurance expiring, they are referring to Term insurance. When the term of 10, 15, 20, etc years is up, your policy may end, or you may choose to continue it at a much higher premium. Most people get a new Term policy when their current one expires.
Sometimes Universal Life policies expire. Rather than having to start over, you can dump money into a UL to make it last longer. This does take a substantial amount of cash; however, you can also reduce the face amount, as long as you are not already at the minimum face amount.
President, Lane Independent Agency, Southern California
With whole life, it never expires, so long as premiums are paid, or appreciation begins to be used to pay those premiums. With term life, after a fixed number of years, the policy could end with some companies, but usually it just means the premium will escalate, sometime dramatically. To avoid this, buy a longer term policy, or buy a permanent policy. Of course, not paying the premium will end insurance. Thank you. Gary Lane.
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
When a life insurance policy expires, the owner of the policy is no longer required to make premium deposits and the company is no longer obligated to pay a death benefit. It is a legal contract that has come to the end of its term. Often companies make provisions to try to keep life insurance policies in force but without some adjustments they can expire. One of the other professionals mentioned expiration in regards to a universal life policy. This is one of the dangers of a universal life policy that is “underfunded.” When the insurance costs in the policy exceed the premium the policy then begins to reduce cash value in order to pay the increased premium. This has an accelerating effect. The older you become the more rapid the increases in insurance cost. If your cash value is declining at the same time the policy will eventually run out of cash value and will expire. Most clients who experience this are caught unawares. The companies do all that they can to keep the policy owner informed but paying that reduced premium is a habit that is difficult to change.
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If the policy expires because it is reached the end of contract and there is no option for renewal, the policy end. For example term policies usually expire at a specified age. You usually have an option to convert to a permanent policy sometime before the expiry date.
If you mean by expiring going out of force because of non-payment you, if you are healthy you can often reinstate the policy by payment of back premiums. Some policies have a cash value that is paid when the policy expires or matures. The policy wording would specify.
If you have any questions, or feel that I could be of asssitance, please do not hesitate to contact me.
Sometimes Universal Life policies expire. Rather than having to start over, you can dump money into a UL to make it last longer. This does take a substantial amount of cash; however, you can also reduce the face amount, as long as you are not already at the minimum face amount.