What If I Outlive My Convertible Term Life Insurance?

Outliving your term life insurance means you've survived beyond the policy's coverage period, whether that's 10, 20, or 30 years. Once the term ends, coverage stops, and beneficiaries receive no death benefit.

Convertible term policies offer a valuable advantage that standard term policies lack. You can switch to permanent coverage before the policy expires. This feature lets you keep lifelong coverage that pays a death benefit to your beneficiaries without proving insurability again, which becomes especially valuable if your health circumstances have changed.

When your term policy reaches its end date, your coverage ends. This means you no longer have any life insurance financial protection, and beneficiaries receive no death benefit if you pass away after the policy expiration. The insurer won't refund premiums unless you bought a return of premium rider when you bought the policy. Riders you added also expire with the base coverage.

Convertible policies let you convert before expiration, unlike standard term policies. If you didn't use the conversion feature, you may still look into other options depending on your health, age, and financial situation.

Reaching the end of your term policy can feel overwhelming, but you have several good options to maintain your financial protection. The right choice depends on whether you're still within your conversion window, your current health status and whether you still need life insurance coverage.

Conversion means switching to whole life, universal life, or other permanent insurance through your current insurer. The main benefit is that you don't need a medical exam to convert. You can lock in lifelong coverage regardless of your current health status, using the health rating from when you originally bought the policy.

Convertible policies have specific conversion windows that vary by insurer. Some allow conversion at any time during the term, while others limit it to the first 5–10 years or require conversion before the age of 65–75. Check your policy documents as they specify your exact deadline.

Your new premium reflects current mortality (life expectancy) tables and interest rates at your attained age, which is why costs increase compared to your original term rates. Converting earlier often results in lower costs. Some insurers allow partial conversions, letting you convert just a portion of your coverage. You might convert $100,000 of a $500,000 policy to permanent coverage and let the rest expire.

Contact your insurer to confirm your conversion deadline and learn which permanent policy types are available.

Most term policies include a guaranteed renewability feature that lets you continue coverage on a year-to-year basis after the initial term ends. Renewal doesn't require a medical exam, which makes it accessible even if your health has declined.

The downside is cost. Renewed premiums are recalculated based on your current age, and the increases can be substantial. A policy that costs $55 monthly during the original term may increase to $254 or more per month upon renewal.* Renewals typically remain available annually until age 90–95.

Renewal works best for people who need coverage for just a few more years or whose health prevents them from qualifying for new coverage at reasonable rates.

*Based on MoneyGeek's survey of major insurers for a 40-year-old male nonsmoker with $500,000 coverage transitioning to renewal at age 60. Individual rates vary based on health, coverage and insurer.

Buying a new term policy makes sense if you're still in good health and can pass medical underwriting (health evaluation). A new policy often costs less than converting or renewing, particularly if you qualify for preferred health ratings. You also gain flexibility to choose a new term length and coverage amount that matches your current needs.

New policies often require a medical exam and health screening. Your age affects life insurance premiums, so applying sooner can help keep costs down. Start shopping at least six months before your current policy expires to avoid gaps in coverage.

If you want lifelong coverage and your conversion window has closed, you can apply for permanent life insurance directly with any insurer. This route usually requires a medical exam, unlike conversion. Permanent policies cost more than term coverage because they build cash value, guarantee a death benefit and may pay dividends.

Permanent coverage builds cash value over time, guarantees a death benefit regardless of when you pass away and may pay dividends with whole life policies. No-exam options are available for smaller coverage amounts, including final expense and burial insurance policies.

Letting your coverage lapse makes sense when you're debt-free, financially independent, have no dependents relying on your income, and have built sufficient savings. Simply stop paying premiums, and coverage ends.

Before letting your policy expire, reassess whether you still need coverage for estate planning, leaving a legacy or covering final expenses.

Life insurance regulations and conversion requirements vary by state. Some states may have additional consumer protections or different conversion timeframes.

Outliving your convertible term life insurance gives you the option to secure permanent coverage without a medical exam.

Act before your conversion deadline expires to preserve all your options. Review your policy to understand your conversion window and available choices. Your options if you outlive your term life insurance include converting to permanent coverage, renewing year-to-year, buying new coverage, or letting the policy lapse if it's no longer needed.

Consider your current financial situation, family needs and health status before deciding. A licensed insurance agent or financial professional can help you compare options and determine the best course of action for your specific circumstances.