What Will My Life Insurance Cost After The Guaranteed Period?
Understanding your Life Insurance Premiums
Your life insurance premium is the amount you’ll pay each month to keep your life insurance policy active. Depending on the type of life insurance plan you take out, the premium could be fixed for the life of the plan or vary as the policy ages. Life insurance premiums vary greatly depending on the policy type, the health of the applicant, and the age of the applicant when the policy is taken out. Many policies offer a guaranteed premium period where the life insurance monthly cost is fixed at a set rate.
What Will My Life Insurance Cost After The Guaranteed Period?
Term life insurance plans offer a guaranteed level premium for a certain period or number of years. Beyond the guaranteed period a term insurance policy has a guaranteed maximum renewal premium, which is explained and illustrated in the policy. The guaranteed maximum renewal premium is the maximum amount you will have to pay to renew your coverage. If you renew your coverage during this time, you’ll pay no more than the maximum renewal period outlined in your insurance coverage but in almost all circumstances more than the original guaranteed level premium when you first purchased your policy.
Should I Apply For Insurance Through A New Insurer?
When your guarantee period ends or your life insurance policy is due for renewal, it may be worth looking at other insurance options. Comparing quotes from multiple insurers is a great way to see your available options and ensure that you’re getting the best rate for your coverage needs. However, one important consideration is that the cost of life insurance increases by age. It means that the rate you got for your first policy is likely to be less than quoted rates you’d receive now that you are older.
What Do I Do If I Don’t Qualify With A New Insurer?
In the event you cannot qualify for a new, competitively rated policy, many policies carry a conversion privilege. This feature allows you to convert your existing term policy to permanent coverage (a whole life or universal life policy). Conversion periods and terms vary from company to company.
What Does This Mean For Your Life Insurance Coverage?
Term life insurance premiums are generally much lower than whole life insurance premium costs. When you convert a term life insurance plan to a whole life insurance plan, you should expect to pay a higher insurance premium each month. To mitigate this increase you may lower your coverage amount so that the life insurance monthly costs fit your budget. Note that this may mean that your insurance coverage may not be adequate for your needs.
Life Insurance Policy Cost—Finding The Most Affordable Plan
If you’re looking to replace your coverage, have questions about choosing a plan, or are wondering if renewing your existing plan is the best option, our licensed insurance agents are here to help you find the best life insurance for your needs.