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What Happens at the End of a Term Life Insurance Policy?

If you are shopping for a term life policy or already own term life insurance coverage, you may be wondering What Happens When My Term Life Insurance Policy Expires?

It’s a very important question, and the answer should help you better understand the options available to you when the time comes. Better to be prepared and plan ahead.

At the end of your Policy Term, your life insurance coverage will end, and you no longer make any premium payments to the insurance company.

If you outlive the duration of your term life policy, you do not receive any money back, there is no pay out of any benefits.

The premiums from individuals who don’t die while their policies are in force ultimately support the payouts that insurance companies can pay to those who do pass away during the life of their term coverage.


When Does Term Life Insurance Expire?

A term insurance policy ends at the end of the policy term you choose when you take out your coverage.

Your coverage term starting date and expiration date are stated on the declaration page of your life insurance policy. 


Term Policy Expiration Example:

If you purchase a 10-year term life policy, that starts coverage at 12:01 am on June 1, 2015 – then the coverage will end at 12:01 am on June 1, 2025. 

Make sure to review your insurance contract (policy) for your exact expiration of coverage and ask your insurance agent, broker or insurance carrier about any questions you have regarding when your coverage ends.


What to Do When Your Term Life Insurance Policy Expires

You’ll have at least a few options available to you when the time comes for your term coverage to end. 

However, make sure you keep in mind the chance that your health may change over time, and you may become uninsurable before your current term insurance plan expires.

So, purchasing a new policy down the road at expiration may be costly, if you are able to qualify for new life insurance at that time.

Options at Expiration of Your Term Insurance Policy

  • Let Your Life Insurance Coverage End – You could choose to go without life insurance if you no longer have a need for protection.
  • Buy a New Policy – You can buy a new life insurance plan when your current coverage expires, or at any time. Your new insurance premiums will be based on your age and health at the time you apply for coverage.
  • Renew Your Current Term Policy – If you have a renewable term life plan you can choose to renew your coverage by a specific date listed in your original policy. The renewal policy may offer coverage for a duration of up to 10 years usually. Your renewal policy premium will be based on your age at time of the renewal of coverage, but you will not be required to take a health examination to prove your insurability.
  • Convert Your Term Policy to Permanent Coverage – If your policy provides the option of convertibility, you may be able to convert your term insurance into a permanent life insurance policy by a specific date listed in your policy. 
  • Stagger or Layer Your Coverage Terms – You can purchase more than one term life insurance policy to meet your various needs. Your life insurance needs may decrease over time, so purchasing coverage for different periods of time will meet your specific needs at a lower overall cost. By staggering your term life policies, you get the coverage you need to protect several different needs at a lower cost.
  • Example of Layering Coverage Terms:  You could buy a 30-year term life policy to provide mortgage protection until your loan is fully repaid. In addition, you could buy a separate 10-year term life policy to guarantee your twelve-year-old child has the money needed to pay for a college education.


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What Happens at the End of a Term Life Insurance Policy?

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