What to do when your life insurance ends?

Nearly 20 years ago, the 64-year-old Westfield, New Jersey resident purchased life insurance to cover his family should the worst happen.

Next year, though, that policy turns lucky, and at his age, Natiello’s insurance premiums would skyrocket if he decided to extend coverage.

Obviously, it’s better than the alternative of not being there anymore. But that raises the question for Natiello and every other insurer in his situation: “Do I still need it?”

It’s a difficult decision that can raise some pretty big existential questions. Such as: How much time do I have left? What is my health condition? Is it still important to secure my family’s financial future?

“Now is actually a good time to reassess your need for life insurance and ask yourself if it’s sufficient or too little or too much,” says Scott Bishop, Houston financial planner.

Remember that there are different types of life insurance on the market, and those with “permanent” versions do not face this conundrum. These types of policies offer different benefits depending on the policy, such as no lapses, investment growth opportunities and cash value that you can withdraw or use to borrow, but they are much more expensive.

Term policies appeal to those who prefer a simpler product with lower monthly premiums. The typical monthly price for a healthy 30-year-old man taking out a 20-year, $500,000 policy — the most common term and the most common amount — is about $19.28 a month, according to aggregator site Term4Sale.com.

So if your “deadline” is approaching, here are some options to consider:


One of the main purposes of life insurance is to protect your family early in your career when you don’t have much to your name. But with enough assets, the equation changes.

“Ideally, they bought the temporary policy when they were young and maybe had young children and a large mortgage,” says Kayla Johnson, a financial planner in Wilmington, North Carolina. “Now they’re close to retirement, the kids are out of the house, and the mortgage is paid off. At this point, life insurance is hopefully a waste of money.”

Now that Natiello’s two children are out of college and he has some universal coverage, the former Wall Street trader decided to let his term policy lapse.


You can choose to keep your current policy running, which is usually renewed every year. The advantage is that you do not have to go through another battery of health tests to be approved.

The downside: As your insurance company takes on more risk, premiums, which were previously stable, will rise.

“They can extend their current policy, but the cost is likely to be much higher. [que l’achat d’une nouvelle police] because the person does not go through the insurance,’ says Elaine Tumicki, head of insurance product research for the industry association LIMRA.


If your first temporary policy arrives successfully and you are still in excellent health, look for a new temporary policy.

Just be prepared for a different drawing process and don’t expect the same bonuses. For a healthy 50-year-old man buying a 20-year policy with $500,000 of coverage, you’ll now receive monthly premiums in the range of $70,100 per month, according to Term4Sale.com. (One way to limit the size of these premiums: Get coverage for a lower amount than before).

Also remember that if you have health problems, it can be difficult to even get a new policy.


Another option is to convert your term policy to permanent cover, which some insurers allow, depending on the fine print in your current policy.

“The conversion privilege on term insurance often allows the policyholder to convert it to a permanent policy, such as universal or whole life, without having to go through another medical exam,” says Amanda Kuhl, senior vice president and head of life insurance products at insurer New York Life.

It’s even better if the converted policy has a long-term care component, designed to help cover future costs associated with disability or chronic illness or nursing home care.

“Can you convert term life insurance into a permanent policy?” asks Michelle Gessner, Houston Financial Planner. “If you can get long-term care benefits as a rider through another life insurance policy, that may be the way to go.”

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