Happy 100! Has Your Insurance Policy Expired?

As life expectancy increases, some individuals are discovering they’ve outlived their life insurance policy.

Some, for example, may have purchased a term life insurance policy with too short a term (like buying a 20-year policy at 60, expecting to live to 80, but your 80th birthday has come and gone).

For others, the problem is a provision in some life insurance policies that sets an expiration date at a specified age. It may be a high age – such as 100 – but it does expire.

Thanks in part to a healthier lifestyle and major advances in medical science, we are living longer. And like many other recent changes, this may be a mixed blessing.

The age limits were not a problem when few people lived beyond 100; but according to census data, there were 72,197 centenarians in the US in 2014, up from 50,281 in 2000.

A new standard: 121

The industry is moving to correct this standard; since the mid-2000s, age 121 has been used as the standard maturity date in new contracts. However, contracts issued before that date still have the previous 100-year-old expiry limit. For those approaching that milestone, it may be time to look at your policy.

In some cases, an expiring policy may not be an issue. The purpose of life insurance is to replace income lost if you die earlier than expected; it’s important when you are a breadwinner, but perhaps not as essential at age 80 or 90.

In other cases, policyholders still hope to be able to provide a payout from their insurance policy to their beneficiaries. In this situation, you may want to contact your insurance company. Some companies have offered older policyholders the opportunity to extend the age limit stated in previous policies. Note that financial terms may vary.

If you have questions or concerns, contact your life insurance agent as soon as possible.