What is a term life insurance plan?
A term life insurance plan is a type of life insurance that provides life cover for a fixed number of years (policy tenure). Many young individuals prefer to buy life insurance plans like term insurance early in life. This helps secure their family financially at an affordable premium.
If the life assured passes away during the policy term, the nominee receives the sum assured. However, if the term life insurance policy matures, meaning the life assured survives the policy term, there is no payout (unless return of premium is opted for).
If the policy matures with the life assured surviving the term, here is what you can do with the term insurance policy:
Renew the Policy
If your term life insurance policy matures and you still want life cover, one option is to renew the policy, depending upon the plan and insurers' terms and conditions. Let’s say you bought the plan at 25 for 30 years. Now at 55, you might still have responsibilities like children’s education or maybe some unpaid loans. In this case, you can extend your cover by renewing the plan.
However, since you are older, your premium may change with age. Your health condition will also matter. If you have any health issues now, it may affect the premium. Still, renewal ensures you continue to protect your family.
This can be helpful if you need term plan insurance for your loved ones during retirement years.
Opt for Return of Premiums
Some plans i have an option of return of premium. However, you need to choose this option at the time of purchasing the policy. This means you get back the money you paid as premiums once the term life insurance policy matures.
Buy a New Policy
If your term life insurance policy has matured and you no longer have coverage, you can consider purchasing a new policy. This is a common option for people who still have dependents or financial obligations. For example, if you are in your late 50s or early 60s and have ageing parents, a non-working spouse, or pending debts, buying a new term insurance plan can help.
However, keep in mind that premiums will be higher due to your age and possible health conditions. Insurers may also require additional medical tests. You can compare different life insurance plans online and choose one that suits your current needs.
Conclusion
A term life insurance policy matures when its term ends, and the life assured lives through the policy. In such cases, there is no payout unless the plan includes features like return of premium. But that does not mean your coverage has to end. You can renew the policy or choose a new plan for future security.
Always read your policy documents and talk to your insurance provider before taking the next step. Whether you choose to renew, accept the return of premium, or start a new plan, make sure the decision suits your future needs.
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