Arizona Tribune - Aflac: What to Do if a Term Life Insurance Policy is About to Expire

Keeping the policy

A policyholder may not need to give up their current policy or find a new one. Here are some options for keeping the policy beyond the expiration date:

1. Extend the coverage

Term life insurance policies may allow policyholders to renew their coverage when the term is about to expire. Renewal typically increases premiums but doesn't usually require a new medical exam, allowing the policyholder to continue with the same policy without the inconvenience of a medical exam. The downside is that policyholders can't shop for more competitive quotes on new, separate policies.

2. Convert to a permanent policy

Some term life insurance policies let the policyholder convert to a permanent life insurance policy at any time. Premiums may increase because the policyholder is older, and permanent life insurance is more expensive than term life insurance. However, permanent life insurance grants lifelong coverage that doesn't lapse as long as one pays premiums before their life insurance grace period ends.

This type of policy also has a cash value growth component that grows with each payment and earns tax-deferred interest. The cash value could become a source of wealth as it grows, possibly allowing the policyholder borrow from or withdraw against it.

By going this route, the policyholder can't shop around and compare rates on other policies. This limits their coverage and premium options. That said, converting to a permanent policy may allow one to omit the medical exam, saving time and inconvenience.

Finding a new policy

Term life insurance policyholders can also decide to get a new life insurance policy once their policy expires. Here are some options they have:

1. Term life insurance

Policyholders may purchase a new term life insurance policy if their previous policy wasn't renewable and they don't seek permanent coverage. This could be a cost-effective option for those who don't need lifelong coverage or an additional wealth-building option. It also lets policyholders shop around for different coverage amounts and potentially better rates than if they stuck with their current policy.

2. Permanent life insurance

Applying for a new permanent life insurance policy may require extra work to find a policy and take a medical exam. However, the policyholder has the flexibility to decide their coverage needs and desired policy type, shop around for the best rates, and customize their new coverage with riders. Here are some permanent life insurance policies to consider:

• Whole life insurance: This type of policy contains fixed death benefits and premiums. The cash value usually grows at a fixed, guaranteed rate. Policyholders can borrow or withdraw from the cash value.

• Universal life insurance: This type of policy contains adjustable death benefits and premiums. The cash value typically works like whole life insurance, but policyholders can also use it to pay premiums.

• Variable life insurance: Policyholders can invest their cash value into funds exposed to stocks, bonds, and other assets for potential growth at higher risks. Other features of variable life insurance policies usually work like universal life insurance.

• Final expense insurance: This is a typically a smaller permanent life policy that is designed to help beneficiaries cover funeral costs, medical bills, and other end-of-life expenses.

Letting the policy expire

Some people get term life insurance for a time-specific goal, such as helping to protect a new child until they're a financially independent adult. After this goal is accomplished, the policyholder may no longer need coverage. In this case, the policyholder can simply let the coverage end. This saves them money on premiums going forward since they no longer need coverage.

The bottom line

Policyholders have plenty of paths to explore when their term life insurance expiration date is approaching. The most convenient option may be to extend coverage or convert to a permanent policy to skip the medical exam. However, policyholders who don't mind taking the medical exam and comparing rates can shop for new term or permanent life insurance. Finally, those who no longer need coverage can let the policy expire and end their premium payments. Policyholders must evaluate their financial goals and current situation to determine what option works best for them.

Content within this article is provided for general informational purposes and is not provided as tax, legal, health, or financial advice for any person or for any specific situation. Employers, employees, and other individuals should contact their own advisers about their situations. For complete details, including availability and costs of Aflac insurance, please contact your local Aflac agent.

Aflac coverage is underwritten by American Family Life Assurance Company of Columbus. In New York, Aflac coverage is underwritten by American Family Life Assurance Company of New York.

Aflac life plans - A68000 series: Term Life Policies: In Arkansas, Idaho, Oklahoma, Oregon, Texas, Pennsylvania & Virginia, Policies: ICC1368200, ICC1368300, ICC1368400. In Delaware, Policies A68200, A68300 & A68400. In New York, Policies NY68200, NY68300 and NY68400. Whole Life Policies: In Arkansas, Idaho, Oklahoma, Oregon, Texas, Pennsylvania & Virginia, Policies: ICC1368100. In Delaware, Policy A68100. In New York, Policy NYR68100. B61000 series: In Arkansas, Idaho, Oklahoma & Virginia, Policies: ICC18B61JWO & ICC18B61JTO. In Delaware, Policies B61JWO, B61JTO.B60000 series: In Arkansas, Idaho, Oklahoma & Virginia, Policies: ICC18B60C10, ICC18B60100, ICC18B60200, ICC18B60300, & ICC18B60400. Not available in Delaware. Q60000 series/Whole: In Arkansas & Delaware, Policy Q60100M. In Idaho, Policy Q60100MID. In Oklahoma, Policy Q60100MOK. Not available in Virginia. Q60000 series/Term: In Delaware, Policies Q60200CM. In Arkansas, Idaho, Oklahoma, Policies ICC18Q60200C, ICC18Q60300C, ICC18Q60400C. Not available in Virginia.

Aflac does not offer universal life insurance, but we can point you toward our whole life insurance policy if you have different coverage goals in mind. Chatting with an agent about your options may make this decision easier.

Aflac Final Expense insurance coverage is underwritten by Tier One Insurance Company, a subsidiary of Aflac Incorporated and is administered by Aetna Life Insurance Company. Tier One Insurance Company is part of the Aflac family of insurers. In California, Tier One Insurance Company does business as Tier One Life Insurance Company (NAIC 92908).

In AR, DE, ID, OK and VA: Policies ICC21-AFLLBL21 and ICC21-AFLRPL21; and Riders ICC21-AFLABR22, ICC21-AFLADB22, and ICC21-AFLCDR22. Aflac Final Expense policies are not available in New York.

Coverage may not be available in all states, including but not limited to DE, ID, NJ, NM, NY, VA or VT. Benefits/premium rates may vary based on state and plan levels. Optional riders may be available at an additional cost. Policies and riders may also contain a waiting period. Refer to the exact policy and rider forms for benefit details, definitions, limitations, and exclusions.

Aflac WWHQ | Tier One | 1932 Wynnton Road | Columbus, GA 31999

Aflac New York | 22 Corporate Woods Boulevard, Suite 2 | Albany, NY 12211

Z2500151 EXP 3/26

CONTACT:

Senior PR & Corporate Communications
Contact: Angie Blackmar, 706-392-2097 or [email protected]

SOURCE: Aflac

View the original press release on ACCESS Newswire

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