Somewhere in the last 18 months or so of your policy’s life, you’re probably going to get a letter from your provider. That letter lets you know your policy is about to expire and that you’ve basically got three options:
1. Renewal: Add a new term to your policy that will give you the same benefit amount. Problem here is that it will take into account your new age and your rates will be much higher. But, say you developed some serious illness, you may not be approved for a whole new policy, so you may just want to take what you can get.
2. Convert to a permanent policy: This is perhaps the easiest option. Here you would roll your policy over into a nice, permanent policy with the same benefit that will last as long as you do. Again, premiums would go up, but you can usually assume that at this point, your kids have grown, your house may be paid for, and the costs fit your budget much better.
3. Terminate: Maybe you’ve already prearranged your funeral and you’ve got things all sorted out for after your passing. In that case, you may find yourself not needing the policy anymore. Or you can terminate your policy and purchase a new type of insurance or a new benefit limit that fits your needs.