What Happens When Term Life Insurance Expires?

Term life insurance covers you for a set period, usually 10, 20 or 30 years. You pay a fixed premium each month, and if you die during that term, your insurer pays a death benefit to your beneficiaries. If you outlive the policy, coverage ends with no payout.

That's the core tradeoff with term life: lower premiums than permanent coverage, but no lifelong protection. Most people buy term life during their highest-need years, when they have young children, a mortgage or dependents counting on their income. Once those obligations shrink, some people don't need coverage anymore. Others do.

Your age, health, coverage amount and term length affect your term life insurance cost. The younger and healthier you are when you buy, the lower your premiums. That's why what happens at expiration matters so much: replacing coverage later in life costs more.

When your term life policy ends, your coverage stops. Your insurer will usually send a notice before the expiration date, giving you time to act. If you don't renew, convert or replace the policy, you're uninsured from that point forward.

Most term policies include a grace period of 30 to 31 days after a missed premium before the insurer cancels coverage. At the end of a term, though, there's no grace period for expiration itself. The policy simply ends on the date stated in your contract.

Some policies automatically renew on an annual basis after the initial term ends, but premiums jump sharply because they're recalculated at your current age without a new medical exam. An annual renewable term policy works this way by design, but most standard term policies don't automatically roll over. Check your policy documents or call your insurer to confirm what happens at your expiration date.

Standard term life insurance pays nothing back at expiration. If you outlived the policy, that's the intended outcome, but you don't recover the premiums you paid.

One exception: return of premium policies. A return of premium life insurance policy refunds your premiums if you outlive the term. The tradeoff is a much higher monthly cost of two to three times more than standard term coverage. Whether that's worth it depends on your budget and how you'd otherwise use that extra money.

For most people, standard term life is the cheapest term life insurance option and the better financial fit. The savings in premiums over 20 or 30 years can outweigh the appeal of getting money back at the end.

You don't have to wait until your policy ends to act. Reviewing your options six to 12 months before expiration gives you the most flexibility and time to shop.

The right choice depends on three things: whether anyone still depends on your income, how your health has changed and what you can afford.

• Start by reviewing your current obligations. Do you still have dependents, a co-signed mortgage or a spouse who would need income replacement? If yes, you need coverage.
• Next, check your policy for a conversion deadline. If you have the option to convert without a medical exam and your health isn't as good as it used to be, convert before that window closes. You won't get a second chance.
• If you're in good health and want to compare options, get quotes for a new policy alongside renewal and conversion costs. Understanding the difference between term and whole life insurance helps clarify whether permanent coverage fits your long-term plan or another term policy is the smarter move.
• Act before the expiration date. Once your policy lapses, you lose the conversion option and return to full underwriting for any new coverage.