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What should I do when my term life insurance policy expires?

April 12, 2012: 5:05 AM ET

I will be 75 years of age in August. I have a $500,000 term life insurance policy that ends in 2014. I can renew it, but the premiums are so large (over $1,000 per month) that I can't afford them. Are there any other options? I have had surgeries for bladder cancer, but otherwise healthy and active.
-- Orville Thompson, Kamuela, HI

One possibility is asking your insurance carrier if you could convert to a lower dollar amount of coverage, which would save on premiums, says Portland, Ore. financial planner Glen Clemans. You could also investigate converting your term policy into a whole life product—which would cover you for the rest of your life—at a lower benefit level. This would likely be more expensive than the previous suggestion, but the premiums would remain level.

But before looking into these options, you might think about how much coverage you really need at your age, asks New York financial planner Erika Safran. Is someone still depending on you financially? If so, might they still be adequately covered by a smaller amount? Or, alternately, could they help by contributing to your current term policy premiums? Review your insurance needs carefully before deciding on a course of action.

-- Jeff Wuorio

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