Do Life Insurance Policies Expire With Time?

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Buying a life insurance policy is typically a wise move when you have beneficiaries to take care of and debts to pay off. When you buy a life insurance policy, you may be concerned about it expiring at some point. Depending on what type of insurance policy you have, it may expire or it may last indefinitely.

Term Life Insurance Policies

  • One of the most common types of life insurance is a term life insurance policy. With this type of coverage, you get a death benefit in exchange for paying premiums to the insurance company. When you buy term life insurance, you get coverage for a specific number of years. For example, your policy might last for 20 years and then it will expire. In some cases, you may get the opportunity to renew the coverage at the end of the term.

Permanent Life Insurance

  • Another type of life insurance that you could buy is permanent life coverage. This comes in the form of whole life insurance or universal life insurance. With these policies, you will have a death benefit for as long as you are alive. Regardless of when you die, your beneficiary will receive a payment. With this type of life insurance, it also accumulate a cash value. Part of your premium goes toward an investment account and grows in value.

Policy Lapse

  • Regardless of what type of life insurance policy you have, it will not last forever if you do not make the premium payments. Every kind of life insurance requires you to pay the premiums if you want to continue to receive coverage. For example, if you start making your premium payments on a whole life insurance policy, the insurance company will eventually close out the policy and you will no longer receive a death benefit from it.

Grace Period

  • When you start making your premium payments to the insurance company, your policy does not automatically lapse right away. With life insurance, you have a grace period built in. Most insurance companies will wait somewhere between 15 and 30 days after your insurance premiums are due before they cancel your policy. If you die somewhere in that grace period, your family would still receive the death benefit of the policy. In some cases, the insurance company might also use the cash value of your policy to pay for a term policy.

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