What happens when your term policy ends?

Term life covers you for a set number of years. Many people aren't sure what happens when that term policy ends.

Knowing your choices ahead of time can help you avoid a gap in coverage. Here's what to expect.

What it means when your term policy ends

When the term ends, your coverage stops and so do your premiums. If you pass away after that date, your family won't receive a death benefit from that policy.

Most term policies don't pay anything back if you outlive the term. Some include a return of premium feature that refunds some or all premiums, but those policies cost more.

Your policy should list the end date. If you're still choosing a policy, our guide on how long your term policy should be can help.

Option 1: Renew your policy

Some term policies are renewable. This may let you keep coverage year to year after the term ends, without proving you're still in good health.

But the premium is based on your age at each renewal, so it goes up each time. Renewal rights may also stop at a certain age.

This can be a short-term bridge for someone who needs coverage for only a few more years. It's often not a good long-term plan because of the rising cost.

Option 2: Convert to permanent coverage

Many term policies include a conversion option. This may let you switch to a permanent policy, such as whole life, without having to prove good health.

This can be helpful if your health has changed. Here are a few things to know:

• There's usually a limited window to convert, and it may close before the term ends.
• Premiums for permanent coverage are higher than for term.
• Conversion rules differ from policy to policy.

Check your policy for the exact rules. Our guide to term vs. whole life explains how permanent coverage differs.

Option 3: Buy a new policy

You can apply for a new term or permanent policy. If you still have debts or people who rely on you, this may make sense.

But a new policy will look at your current age and health. You may need a medical exam, and premiums will likely be higher than when you were younger.

It's wise to keep your current policy until a new one is in place. That way you're not left without coverage while you wait.

Option 4: Let it go

Sometimes the need for coverage has passed. Your kids may be grown, your home may be paid off, and your savings may be enough.

Before letting a policy end, think about:

• Whether anyone still depends on your income
• Any debts that would pass to loved ones
• Final expenses, like funeral costs

If those are covered, you may decide you don't need more insurance. You can read more about term coverage on our term life page.

Common questions

Do you get money back when term life insurance expires?

Usually not, since a standard term policy has no value once it expires. A return of premium policy may refund some or all premiums, but it costs more up front.

Do you need a medical exam to renew term life insurance?

With a guaranteed renewable policy, you may not need a new exam. The trade-off is that premiums usually rise each year.

Bottom line

When a term policy ends, the coverage stops. You may be able to renew, convert, buy new coverage, or simply let it go.

The best time to plan is well before your term ends. Our team can help you review your policy and look at your choices.

Have questions about your situation? Book a complimentary call with our team.

This article is for general education only and isn't financial, tax or legal advice. Product features vary by carrier and state. Talk with a licensed professional about your situation.