Understanding the End of Your Term Life Insurance
Term life insurance is designed to provide peace of mind for a set number of years—typically 10, 20, or 30. But what actually happens when your policy reaches the end of its term? Many policyholders are surprised to realize that this milestone comes with important choices and potential next steps.
Your Options When the Term Expires
When your term life insurance expires, your coverage ends and your beneficiaries no longer receive a payout if you pass away. However, your insurer may offer a few options:
- Renew the Policy: Some insurers allow you to renew your policy yearly, though premiums usually increase based on your current age.
- Convert to Permanent Insurance: Many term policies include a conversion feature, letting you switch to a permanent policy (like whole life) without a new medical exam.
- Let the Policy End: If you no longer need coverage, you can simply let your policy lapse at the end of the term.
How to Plan Ahead
The best time to think about what happens at the end of your term is before you reach it. Review your financial needs, dependents, and health status as your policy nears its expiration. If you anticipate needing more coverage, consider shopping for a new term life policy early—while you’re younger and healthier, which can mean lower rates. For more practical advice, visit our term life insurance guide.
Is Renewing or Converting Right for You?
Deciding whether to renew, convert, or let your policy end depends on your personal situation. If your family’s financial needs have changed or you want to lock in lifelong coverage, a conversion might make sense. If your children are grown and your mortgage is paid off, you may no longer need as much insurance. For more tips on evaluating your options, check out our resources on choosing life insurance.