Nothing can ever be taken for granted, even your life for that matter. Life is full of unexpected twists and turns. A life insurance is like a plan B that helps you prepare for such uncertainties in a cost-effective and simple manner. With economical life insurance plans such as Term insurance, you do not have to worry about making a fortune to secure the future of your family.
However, if you buy term insurance, you have to make premium payments regularly. If you miss out on any of the premium payments, your policy will lapse and you will lose out all the benefits. Additionally, since life term insurance policies are only valid for a certain period of time, renewal of the policy is essential if you want continued protection. Whether you buy term insurance online or from an agent, all of them will be eligible for renewal. Here’s why renewal of a term insurance policy is very important:-
No Need to Undergo Medical Tests for Renewal
When you purchase life insurance for the first time, it is compulsory to undergo a medical test. The premium payable is decided based on the health risks for an individual. However, in case of renewal of a term insurance policy, you need not undergo any medical tests. Hence, regardless of your state of health, you can renew your policy effortlessly. On the other hand, if your policy lapses and you develop an illness, you will never be able to purchase a life insurance policy.
Buying a New Life Insurance Policy Will Be Expensive
When you renew a life insurance policy, you only need to pay the regular premium amount. However, if your policy lapses, the premium payable will be reviewed again according to factors such as age, state of health, family check etc. Hence the premium payable with be much more, if you buy a new life insurance policy.
You Will Lose Out On Tax Benefits
A life insurance is one of the most effective ways to save up on tax. Once your policy lapses you will not be able to claim deductions on your taxable income. Hence, if you want to enjoy continued benefits of tax deductions, renewal of the insurance policy is essential.
Defeats the Purpose of Insurance
By letting your policy lapse, you will lose insurance protection in spite of paying a premium for so many years. Moreover, if any eventuality were to occur once the policy lapses, you may end up in a precarious financial situation. Just like you put efforts to buy a life insurance policy, you need to ensure the renewal of the policy as well so that your family stays secure.