Why is it Important to Renew your Term Insurance Policy?

Importance of renewing your term insurance policy:

• Continued financial security of the family: Renewing your term insurance policy ensures that your beneficiary is financially protected, against any uncertainty. However, when you fail to renew the cover and the policy lapses, your family is not equipped to face any eventuality in your absence. This defeats the whole purpose of buying a term plan in the first place. Hence, you must pay equal importance to renew your policy as you do to buying a term plan and choosing a sum assured.
• Extended coverage: Term insurance plans do not have a savings component. Hence, when the policy matures, and if you fail to renew your insurance, you essentially forgo the benefit of all the premiums you paid before. However, if you choose to renew and extend the term plan coverage, your family remains assured for a longer term in case of your premature death. Moreover, the premiums for term plans are minimal. So, you will not face a severe financial burden.
• Avoid extra expenses: When you buy a term plan, your life cover and premiums are seriously impacted by your age, medical history, lifestyle habits, etc. And if you are younger, you pay low premiums. However, when you fail to renew your insurance plan, you might have to go through the entire buying process again. Your insurer will ask you to undergo the medical tests again. And, in all of it, you will likely end up paying a higher premium, and other charges. Also, in case you stop paying premiums before the policy matures, you will lose out on the value of all the premiums paid before.
• Tax benefits: Premiums paid for term plans are exempt from taxes under Section 80C of the Income Tax Act, 1961. If you do not pay your premiums and your policy lapses, you do not get any tax exemption for the amount paid. This will increase your taxable income in the financial year, burdening you with a greater tax duty. Moreover, your beneficiaries also get tax advantage on the death benefit of a term insurance plan under Section 10(10D) of the Income Tax Act. But if you fail to renew the policy, you or your beneficiaries will not get any tax advantage.

That said, a term insurance plan has become a necessity, and so has the term insurance renewal. However, not all insurance companies let the term insurance renew. Hence, it is critical to check your insurance contract terms beforehand, especially before you default on your premiums or miss the renewal date. In case your insurer offers you the renewal option, you will get the same sum assured value and full life coverage as your original term plan. But insurance companies allow you to renew the term plan only up to specific age.

Conclusion

In all, a term plan is a critical asset in today’s uncertain times to provide the much-needed financial security to your family. That is why it is extremely important to ensure consistent coverage by renewing your term insurance plan well-in-time. With PNB MetLife, you can opt for a term plan that fits your budget and provides comprehensive coverage. You can also renew your term insurance cover easily online without any hassle within minutes.

Know more about Long Term Savings, Term Insurance & Term Plan by visiting PNB MetLife website.