We all are aware of the fact that life is full of uncertainties, so at a very young age itself, we start planning for different things that keep our family and our loved ones protected. Out of all uch initiatives, one of the most common strategies is investing in a life insurance plan. A life insurance can easily help you a lot in safeguarding the future of the family. A life insurance plan will provide the needful financial support to the nominee as the death benefit in case of insured’s demise.
While investing in a life insurance plan, it is important for the buyer to be sure that he/she is paying premiums of the same regularly. In case of any failure regarding the premium payment then your policy will lapse and it will be of no use. However, there are many life insurance companies that offer the renewal as a plan’s feature. This should be there in your plan to get the option of renewal which is really beneficial. Investing in a life insurance plan is important but paying premium or renewal of the same is also vital. In this article, you will come to know that Why renewal of term insurance policy is important.
Renew for a Similar Term?
Let us assume that you own a term insurance that comes out with the option of renewal, for a term period of 5 years. When the same tenure comes to an end, then the insured must be having the option of renewal for an additional 5 years.
Why is Renewal of Term Insurance Policy Important?
Well, it is a common question that most of the customers asked, Let’s assume that there is a person who has a term insurance policy but suffer from the heart attack, just prior the policy expires. In such cases, if the policy is not renewed then the insurance company might face many problems to buy a new plan
The renewal feature comes along with the opportunity of extending the coverage. Moreover, you don’t have to go through the medical test for the renewal of the policy.
There are a few cons that a person can face if he/she fails to renew the policy.
- It defeats the Purpose of Insurance- The biggest drawbacks in such a situation is that the coverage that the benefits that you are getting will get lapsed. And in case of any eventuality that takes place during this phase then the policy will be liable to offer any benefits to the nominee. Well as discussed above, to secure the future of your loved ones timely renewal of existing term insurance policy is equally important. Just put your best efforts for your family’s future.
- It May Cost you more Expensive- When it comes to investing in a life insurance plan, you pay a regular premium to the insurance company. Prior to zeroing in on the premium, there are a few factors to consider is age, medical history, family check, etc. In case, where the policy gets terminated because of non-renewal then the policy will not be liable to pay any benefits to the nominee/beneficiary. If you decided to renew the policy later, then for sure it will cost you more.
- No tax Benefit- We all know that investing in an insurance policy is the most efficient ways of safeguarding the future of your family. It also acts as a great tool to achieve different financial goals. It also offers tax benefits while filing income tax return.
So from the above detail information, it is clear that if you don’t renew the life insurance plan on time then it will surely lapse and no benefits will be applicable.
In today’s world, owning a life insurance plan has already become a necessity for every person but don’t forget the importance of renewal. It is true that not all insurance plans come with the option of renewal, you have to check the same at the time of purchase itself. You must check the option at the time of purchase and ask insurer about the same as well. You can take help of an online insurance web aggregator such as PolicyX for your term insurance purchase.
Just choose the best one for yourself today, it is not about you only it is about the future of your family.