No Guarantee on what Renewal Rates or Term will be

This provision ties into the renewal feature explained above, but takes it one step further. If a term life policy renews, it generally renews on a one-year term basis. As an example lets say that you buy a 10-year term policy and in the 11th year it changes to a 1-year term. Guess what, instead of the company raising your rates every 10 years, now they are raising your rates every year. And if the company is having financial problems, they can raise the rates even more on top of the annual rate increases.

From my experience, the 1-year term rate that companies charge once a policy gets to the period beyond the initial guarantee period, is very high. Not a good option for someone that can’t re-qualify for the best rates. Some companies offer what’s called a reentry provision. If they do, you generally have to qualify for reentry. Even if you can qualify for reentry, many companies don’t offer the their very best rates to you, like they would if you’re a new customer coming in the door to apply for coverage. Heck of a way to treat a loyal long term customer isn’t it.

The best companies will offer to renew your coverage for the same term period that you applied for. So if you bought a 10-year term policy, it should offer to renew for another 10-year term on the second go around and the third time and so on so forth. If your life insurance company isn’t protecting you and your family with this type of policy, get away from this company as fast as you can. Get a Financial Advisor to help you get the best protection possible.