If I buy a term life insurance policy with a term of 20 years...what happens at he end of the 20 yrs?

Question

I know this sounds dumb, but do i just put the policy in a safe deposit box until I die? I'm in my 40's and know I need to get a policy, and just have so many questions that I can't seem to find the answers to on the web. Any help is appreciated, as well as any websites that give a lot of info. The salesmen are sooo pushy sometimes. I've been on Suzeorman.com, but I can't seem to find all the answers there.

Answer 1

Use the tool on my site...

http://insurancepickle.com/life-insuranc...

It requires no personal information other than a date of birth and will quote the rates from ~150 companies.

You need to find a broker that does what I do that you can trust.  There's no point in trying to figure it out on your own.  A broker represents many companies and the price for the policies like you'll find on my quote engine will cost you the same no matter if you go direct to the insurance company, buy through Agent A, Broker B, or large online quoting company.  Insurance is a regulated industry, so use the source that will be of the best value to you by way of knowledge and service.

People like the tool on my site because it gives the quotes of many carriers and it doesn't just quote (like some agents do) 3-5 companies.  Even the large online quoting companies only do 8-12, but they don't necessarily quote the one that would be 'best' for you.

Anyway, regarding your question.  Twenty year policies don't renew...at least 99% of them don't   For all intents and purposes you're done at the end of the 20 years because, depending on your age, the premium will go to astronomical levels - anywhere from 10-40 times the current rates and annually increase from there until you're 100 years old.  Most people don't keep the policy for more than 1 or 2 years beyond the level period.  

They don't renew anymore because nobody would buy that kind of policy now because the premiums aren't competitive to other policies.  And, I haven't seen a policy do that in more than 10-15 years.  Term insurance policies are inexpensive because the insurance company is only on the hook for the 20 years unless of course you convert the policy to a cash value policy down the road.  But, even then you're paying much higher rates.

If you consider a return of premium term policy you'd either get all of your money back after the 20 years or you could take (depending on your then age and the company) anywhere from 150% of the cash up to 300% of the cash in the form of a permanent death benefit to keep forever.  It's a great planning tool amongst the other benefits.

Hope that helps.

Answer 2

The premium will remain level for 20 years.  At that point most term policies go into an annually renewable period that allows you to keep your coverage, but at premiums that will increase every year usually up to age 70 or 80.  At the end of 20 years most reasonably healthy people will either drop the coverage or go buy a new policy at cheaper rates.  

Just make the agent show you all the fine print on the policy before you pay anything.  

Answer 3

At the end of 20 years, it will do what is stated in the policy.  It may renew, it may convert to a cash value policy, it may just lapse and you'll have no coverage.

There are policies that will auto renew into 5 yr level terms till age 70 (can go out to age 74 if renewed at age 69) then either an annually renewable term (price goes up every year) or a decreasing term to age 100 (price stays same, coverage goes down every year).

Any more questions, feel free to contact me outside of here.

Answer 4

Term life insurance has no value unless you die before the 20 years is up. In that case, your beneficiary would be paid the amount of the policy. At the end of the term, if you are still alive, the policy is worth nothing. The only thing that happens is that you are no longer insured.

You are thinking of whole life insurance, which does have cash value even if you don't die. This type of insurance is more expensive than term and is not a good idea for most people. There are lots of better ways to save for the future than through insurance companies, which don't pay a very high return.

Answer 5

At the end of 20 years, it expires.  Sometimes, if you opted for it, you can renew it for another 20 years.

Now, this is important.  DO NOT KEEP YOUR LIFE INSURANCE POLICY, OR YOUR WILL, IN YOUR SAFETY DEPOSIT BOX.  If you die, no one will be able to get to them.

You really need to deal with a local agent - if you ask around, I'm sure you could find a non-pushy one.  Or, you can go to www.zanderinsurance.com  .. .  they're not pushy there.