If you own a term life insurance policy, you are only covered during that term length.  Once the term ends, your coverage does as well.  It’s a common question that one asks: What happens to all that money I paid in premiums if I live?  The short answer is: You lose it.

The point of term life insurance is to ensure your family is protected by replacing your income if something unexpected happens to you.  If the insurance company doesn’t pay out the death benefit that means you’re still alive and shouldn’t have too much to complain about.  Term insurance is the “better safe than sorry” financial planning option.

Where did my money go?

Everyone who is paying life insurance premiums is essentially putting all their money in a large metaphorical bucket managed by the life insurance carrier.  When the company needs to pay out a death benefit, they take from that bucket.  Your money is going to help another family in need of financial support because of a lost loved one.  If you do die during the term of your policy, the company reaches into that bucket that everyone is paying into and gives that money to your beneficiaries.

What if I want to continue being covered?

If your term policy is ending and you want to continue to make sure your family is protected, you can convert the policy into a permanent one.  Most term insurance policies have a conversion rider automatically included.  The rider would ensure you can’t be deemed uninsurable by the insurance company no matter your age or health.

What if I have a return of premium term policy?

If you have a return of premium term life insurance policy, you get back the premiums you paid.  Owners of ROP policies pay higher premiums for the benefit of knowing they get back their money if they outlive their term.

No one ever anticipates needing to use life insurance, but the unexpected happens.  Be prepared and get a free and anonymous term life insurance quote today.


Related Posts:

What Is a Term Conversion Rider and How Does It Work?

What You Need to Know About Your Term Life Insurance Policy

What if I Can’t Pay My Term Life Insurance Premiums on Time?


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