Oklahoma Life InsuranceTerm life insurance policies are popular products for those who are just getting started and those who need a little extra padding as they work to pay off debt and increase savings. But term policies are temporary and it’s important that you understand what happens when coverage ends, before you buy one.

What Is Term Life Insurance?

When you buy term life insurance policy, you pay a small premium in exchange for a death benefit that is payable if your death occurs during the specified term of the policy. You may buy a 5, 10, 15, 20 year or longer term policy and you can buy it as a supplement to a whole (or permanent) life policy.

Regardless of your reason for choosing a term life insurance policy, at the end of the period that the policy is meant to cover you, there will no longer be any insurance protection provided by that policy. That means if your death occurs outside of the term of the policy, your heirs will receive no death benefit. However for certain individuals, the end of their policy term isn't the end of the story.

Return of Premium Rider

If you had a return of premium rider on your term life insurance policy then you may receive a refund of all premiums paid for the policy, including those paid for the rider, after the policy’s term ends. Your insurer may not pay this benefit if you allowed your policy to lapse before the term or if you made a late payment.

Policy Renewal or Conversion

Some policies also allow you to renew your coverage after the term ends without any new underwriting if you have a guaranteed insurability rider. This makes it optional for you to renew your coverage for another 5, 10, or however many years, although you may need to pay a higher rate based on your age.

You may also be able to convert your term policy into a whole life policy during a small period of time after the term ends. Your insurer may require you to go through underwriting again, which may consist of taking a paramedical examination and submitting medical records. The extent of your underwriting may depend on the amount of the death benefit, your age and your health.

If you are ready to begin looking at Oklahoma life insurance options including term and permanent policies, give us a call at Magil Insurance Agency. We can help you determine the right death benefit and policy type for your situation and budget.
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