What is extended term life insurance?

What is extended term life insurance?

Extended term life insurance is a type of insurance policy that allows the policyholder to extend their coverage beyond the initial term without needing to undergo additional medical underwriting. This means that the policyholder can renew their coverage for a specified period, usually at a higher premium, without having to prove insurability.

Extended term life insurance is an attractive option for individuals who may have developed health conditions since purchasing their original term life insurance policy and are concerned about being able to secure coverage if they were to apply for a new policy.

FAQs about extended term life insurance:

1. How does extended term life insurance differ from regular term life insurance?

Extended term life insurance differs from regular term life insurance in that it allows the policyholder to renew their coverage without undergoing additional medical underwriting.

2. What happens when the initial term of the policy expires?

When the initial term of the policy expires, the policyholder has the option to convert their existing policy to an extended term life insurance policy.

3. Can the premium for extended term life insurance change?

Yes, the premium for extended term life insurance can change, usually increasing with each renewal period.

4. How long can extended term life insurance be renewed for?

The length of time that extended term life insurance can be renewed for varies depending on the terms of the policy, but it is typically renewable for additional one-year terms.

5. Is extended term life insurance more expensive than regular term life insurance?

Extended term life insurance may be more expensive than regular term life insurance because the premiums typically increase with each renewal period.

6. Are there any limitations on who can purchase extended term life insurance?

While most individuals may be eligible to purchase extended term life insurance, some insurers may have age restrictions or limitations based on health conditions.

7. Can the coverage amount be changed when renewing an extended term life insurance policy?

In most cases, the coverage amount cannot be changed when renewing an extended term life insurance policy, but the policyholder can typically purchase additional coverage if needed.

8. What happens if the policyholder passes away during the extended term period?

If the policyholder passes away during the extended term period, the death benefit will be paid out to the designated beneficiaries just like with any other life insurance policy.

9. Can extended term life insurance be canceled before the end of the term?

Most extended term life insurance policies allow for cancellation before the end of the term, but the policyholder may lose any accumulated cash value or surrender fees may apply.

10. Can the policyholder switch to a different type of insurance during the extended term period?

In most cases, the policyholder cannot switch to a different type of insurance during the extended term period, but they may have the option to convert to a permanent life insurance policy.

11. What happens if the policyholder becomes uninsurable during the extended term period?

If the policyholder becomes uninsurable during the extended term period, they may lose the ability to renew their coverage and may need to find alternative insurance options.

12. Can the policyholder borrow against the cash value of an extended term life insurance policy?

Some extended term life insurance policies may allow the policyholder to borrow against the cash value, but it is important to check the terms of the policy to determine if this option is available.

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