What Is the Maximum Age You Can Renew a Term Life Insurance Policy?

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Term life insurance policies are life insurance policies that provide temporary coverage up to age 85. The maximum age you can renew your policy will depend entirely on the type of policy you purchase. Before you renew your policy, make sure you understand the different types of policies and the maximum allowable ages for renewal.

Annual Renewable Term

Annual renewable term life is life insurance that renews every year. This type of life insurance automatically renews up to age 85. Beyond this age, you will not qualify for any type of life insurance and your term policy will be canceled.

Level Term Life

Level term life insurance inflates the premium amount over the actual cost of the death benefit and levels out the premium payments for a specific period of time. The excess premium over the cost of insurance is invested. This is what allows the insurer to keep the premium payments level. When you purchase level term life, you generally choose between a 5-year, 10-year, 15-year, 20-year or 30-year term policy. Life insurance companies do not insure you beyond age 85 with a term policy, so the maximum age at which you may be able to renew your policy depends on the policy you have purchased. For example, if you are 65 and you want to renew your 30-year term policy, the insurer will likely only allow you to renew your policy with a 20-year term policy since this would carry you to the maximum insurable age.

Solutions

To overcome the age limits of renewing your term life policy, you can convert your term policy to a permanent life insurance policy. Permanent life insurance, like whole life or universal life insurance, stays in force for your entire life. You'll need to pay premiums for the rest of your life in many cases, but your insurance coverage is guaranteed and you won't have to worry about renewing your coverage or increases in your premium anymore.

Consideration

As you get older, term life insurance becomes increasingly expensive. Permanent life insurance offers higher premium payments than term life, but the premiums can be made level for your entire life. Before considering whether or not to renew or convert your policy, carefully consider your financial goals. If you think you'll need life insurance beyond age 85 for burial or funeral expenses or for some other purpose, then you may want to consider converting your term policy. However, if you have sufficient savings, you may not need to renew your term policy at all. Life insurance is designed to insure any unpaid financial liabilities. If your savings is sufficient to pay off all of your debts, you might not have a need for life insurance.

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References

  • "Life Insurance"; Kenneth Black, Jr., Harold D. Skipper, Jr.; 1994
  • "Life & Health Insurance, License Exam Manual, 6th Edition"; Dearborn Financial; 2004
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