Life insurance is a type of cover that pays a lump sum to a beneficiary or beneficiaries nominated by you, on the event of your death. It offers peace of mind that your loved ones will be financially secure when you are no longer around. However, if you have chosen a ‘term’ policy, it will only be in effect for a set amount of time. Once the policy has expired you will need to renew. And in the interim between the old and new policies you will be unprotected. So you need to take action to prevent this.
The first thing you need to do is to be aware of when your existing policy runs out, and make plans accordingly. It is wise to apply for a new plan at least three months prior to the end of your current policy. This will give you time to research various options without having to make a hasty decision and also ensure that you are still covered while you are waiting for final approval from your new policy provider. It can take four to six weeks for final approval to come through – this is because your medical history will be checked and and you will also have to undergo a thorough medical examination.
To make it easier to keep on top of key dates you may want to think about using an online term life insurance provider. This way you can monitor your policy and see if there are any other more economical options available to you. You may find that your existing policy could become less expensive as you get older! Life expectancy is rising, therefore getting older is not necessarily seen as much of a risk to insurers today as it was, say, ten years ago. But your provider isn’t going to offer to reduce your premiums without you bringing it up first! It’s wise to check online every year or so.
If you find yourself in a situation where your insurance has lapsed then there are still options open to you. You could get guaranteed coverage which doesn’t require you to undergo any medical examination. Although you will get coverage immediately the chances are that it will be more expensive than a ‘normal’ term life insurance policy. Or you could opt for a term plan that includes a binding coverage option. You submit a TIA form with your application and you will automatically be covered until your application is processed. If it turns out that you do not qualify for the policy you will be refunded any premiums that you have paid.