My mom has term life insurance for 10 years for New York Life.. is it true that in 10 years, she'll be able to renew it another 10 years? Won't that be more expensive? Also, what happens if you buy that 20 year term insurance and you don't pass away until 21, 22 or even 30 or more years? What happens to all your money, and isn't there a way to renew it? I heard that it would cost thousands and thousands more to renew it after 20 years.. Also, what about universal life insurance? I hear it's no good, but my mom wants to buy that too.. Can anyone please explain a bit?

Hi Alexandria,

I hope I can help answer some of your questions - here goes:

1. Will your mom be able to renew in 10 years - this depends on whether she has purchased the option of Renewability on her current term life policy.

2. Yes, the premiums will be more expensive in 10 years, based on her age and health at that time.

3. If you buy the 20 year term policy and pass away after the 20 year term period, you have outlived your coverage, and the policy expires with no payout, and there is no cash value paid out, that is only with permanent life insurance policies. However, there is a way to renew the policy, if you have purchased the "Renewability Option", however, with a 20 year term policy, this may or may not be available, depending on your mother's age.

4. As for the cost to renew after 20 years, it will probably cost more. However, you may want to get a quote for your mother's current age and then get a quote adding 20 years to her age. This may give you some kind of understanding, at least today, of the difference in premiums now and in 20 years. Of course, rates have declined over the past 20 years, so it may be less (or more). Again, it depends on your mother's health at that time, as well.

5. Universal Life Insurance - Is a form of adjustable life insurance under which the premium are flexible, not fixed. Also, the life insurance coverage amount is flexible, not fixed. And, the life insurance company expenses and other charges to the policyholder are specifically disclosed to the purchaser of the policy. This type of life insurance policy is referred to as "Unbundled Life Insurance" because its three basic elements (Investment Earnings, Pure Cost of Protection, and Company Expenses) are separately identified in the life insurance policy and the annual report to the policyholder. After the first premium, additional premiums can be paid at any time. A specified percentage expense charge is deducted from each premium payment before the balance is credited to the cash value, along with interest. This type of coverage should be reviewed thoroughly with your mom's life insurance agent to fully understand the intricacies of the policy.

Above clarification to your questions is correct and there is many other options or different plans also available.

Have her investigate a fixed UL product. There are some available that are guaranteed to run to age 100 as long as you pay your premiums.

Yes, she should get out of term if she wants to continue owning life insurance in her later years. Her policy should have answers to all or most of those questions.

It’s the way you think and everyone has their own way of going on in life.