What happens when a term life insurance policy ends

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UPDATED: Jul 22, 2022Fact Checked

• When term life insurance ends, you can often renew or convert your policy
• You can also choose to buy a new life insurance policy
• Check with your life insurance company for the most accurate information on your options

Does life insurance expire? It depends on what kind of life insurance you have. Term life insurance offers coverage and benefits for a fixed period, so it does expire at the end of that period. However, if you outlive your term life insurance policy, you have several options for continued life insurance coverage past the insurance expiry period.

• What do I do if I outlive my term life insurance policy? 
  • Renew your term life insurance every year
  • Convert your term life insurance to a permanent policy
  • Get a new term life insurance policy
  • Buy a permanent life insurance policy
  • Let your life insurance coverage lapse
• Life Insurance Options After a Term Life Insurance Policy Ends
• The Final Word on What To Do When Term Life Insurance Ends

What do I do if I outlive my term life insurance policy? 

When a term life insurance policy matures, you have a few choices for what to do next. The life insurance options available will depend on your insurance company, age, health, and family history as well as what type of term life insurance policy you have.

Below are the options you may have when your term life insurance policy matures.

Renew your term life insurance every year

Most term life insurance policies will allow you to renew the policy year-to-year until you reach age 95. Check with your life insurance company to learn the exact rules for renewable term life insurance. 

When you renew your term life insurance by year, your premiums will likely increase. Although you can renew your policy to receive the same coverage and benefits, there’s no guarantee you can keep the same rates. 

Renewing term life insurance helps you avoid proving your insurability via a medical exam or other documentation, which could be beneficial if you developed serious health conditions during your term policy that would make it difficult to buy a new policy.

Convert your term life insurance to a permanent policy

Many term life insurance policies offer a term conversion rider. Term conversion means you can change your term life insurance into permanent life insurance without reapplying or proving your insurability again.

Although term conversion is more common now, the rules for converting a policy vary widely from insurer to insurer. For example, some insurance companies limit the types of permanent life insurance you can convert to, while others place time or age limits on the conversion.

Term conversion can be a great option for policyholders who want to maintain their life insurance without the hassle of finding a new insurer. However, since permanent life insurance works differently from term life insurance, be sure to understand the difference before committing to a new policy fully.

Get a new term life insurance policy

Younger policyholders in good health can keep premiums low by purchasing another term life insurance policy. You can adjust the length of the term or the coverage benefits when you buy a new policy to keep your premiums affordable.

Buying a new term life insurance policy makes sense if you’re still relatively young and healthy. It’s also a good option for people looking to ensure their dependents are cared for until they are financially independent.

Buy a permanent life insurance policy

If your policy doesn’t allow term conversion, you can also purchase a new permanent life insurance policy.

Buying a permanent life insurance policy requires more work to research and apply for, but if term life insurance no longer meets your needs, it can be a good solution.

Remember that permanent life insurance is often far more expensive than term life insurance. So be sure the benefits and coverage on your policy are worth the higher premiums.

Let your life insurance coverage lapse

You can let your policy lapse if you no longer need life insurance. You won’t need to renew, reapply, or convert — you can simply let it expire.

Without a life insurance policy, your loved ones won’t get financial support in the event of your death. Make sure your dependents are taken care of before deciding to let your term life insurance expire. 

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Life Insurance Options After a Term Life Insurance Policy Ends

Not sure if switching to permanent life insurance is the best move for you and your family? Here’s a quick look at different life insurance types you might consider when your term life insurance policy ends:

• Whole life insurance. Whole life offers a guaranteed death benefit and rate of return. You’ll build cash value as you pay your premiums, which you can apply to your premium payments or borrow against in some instances.
• Universal life insurance. For more flexibility in your benefits, consider universal life insurance. You’ll have more freedom to change your benefits or premiums throughout the policy. However, your interest rates will mirror general interest rate trends. 
• Final expenses insurance. If you don’t need a death benefit, final expenses insurance might be sufficient. Sometimes called burial insurance, it covers funeral costs upon your death. Rates are lower, but your loved ones won’t get a payout beyond burial expenses.

Whole and universal life insurance work differently from term life insurance. If you decide to purchase a permanent life insurance policy once your term policy matures, take the time to understand the details to give you and your loved ones the best possible benefits.

The Final Word on What To Do When Term Life Insurance Ends

When your term life insurance policy expires, you have plenty of options to maintain coverage in the event of your death. Talk to your insurer about the options for your existing policy and get information about other life insurance types too.

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Editorial Guidelines: We are a free online resource for anyone interested in learning more about life insurance. Our goal is to be an objective, third-party resource for everything life insurance-related. We update our site regularly, and all content is reviewed by life insurance experts.

Schimri Yoyo is a financial advisor with active life and health insurance licenses in seven states. Born in Haiti. Reared in Brockton, MA. Matured in Philadelphia. Schimri is a proud graduate of Arcadia University, having earned both a Masters in Special Education and an MFA in Creative Writing from the castle-riddled campus in Glenside, PA. By personality and by profession, Schimri is an educator... Full Bio →

Written by Schimri Yoyo Licensed Agent & Financial Advisor

Benjamin Carr was a licensed insurance agent in Georgia and has two years' experience in life, health, property and casualty coverage. He has worked with State Farm and other risk management firms. He is also a strategic writer and editor with a background in branding, marketing, and quality assurance. He has been in military newsrooms — literally on the frontline of journalism. Full Bio →

Reviewed by Benji Carr Former Licensed Life Insurance Agent

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