Term life policies provide affordable long-term protection, but they don’t last forever. If you’re at the end of that 10, 20, or 30-year plan and aren’t sure what to do next, don’t worry – you have options. Here’s what you need to know about outliving a term life policy.

What happens if you outlive your term life insurance?

Term life is meant to provide temporary financial protection during the times you need it most, like when you’re working, raising a family, and making big purchases, like a house or car.

Term lengths typically start at 10 years and go up to 30 years. Unlike permanent plans, which last a lifetime, term life coverage will expire once the policy term has ended.

So if you bought term life to cover you while you paid off your house and that final payment is coming up, you may be considering your next step. Here are a few things you can do:

• Buy a new policy. If you’re not ready to give up the protection of life insurance just yet, you can buy a similar term life policy once your current coverage has ended. Remember that the same  life insurance costs more as you get older, you may have to pay more for the same coverage. You can also consider a different type of insurance altogether, like final expense.
• Extend your current policy. Happy with the coverage you already have? If you don’t want to change it once the policy expires, you may have the option to renew your current plan for certain periods (see “renewable term” below). Since you’re simply extending the coverage you have on file, you won’t need to requalify or take a medical exam, which may work well if you’ve developed health issues since you first bought coverage.
• End your coverage. If you bought a term policy to protect you while the kids were young or you were paying off your mortgage, you may not need it anymore now that those obligations have been met. Now would be a good time to take another look at your financial situation and needs to see if a life insurance policy is still necessary. If it isn’t, you don’t need to do anything because the coverage will end naturally.

Do you get your money back at the end of a term life insurance policy?

Term life insurance is something you buy just in case, like auto or medical insurance, and hope you won’t need to use. With term life, you won’t be reimbursed for your premiums when your coverage ends. Unlike permanent plans, term life also doesn’t come with a cash value option, so there’s nothing to cash out when this policy type ends.

These factors help explain why term life plans are so affordable. If you’re looking to build wealth you can count on later, consider buying term life and putting the extra money you would have spent on permanent life into a savings or investment account that will grow over time.

Can term life insurance be extended?

Renewable term life plans are a type of term life insurance that you can renew after a certain period, sometimes every year. This allows you to get the best possible rates for short-term life insurance, with the option to continue coverage if you need it.

When you renew these types of term life insurance plans, your coverage will stay the same. And because you’ve already qualified once, you won’t have to worry about eligibility again, especially if you develop health issues later. Your premiums, however, will increase every time you renew your plan as you get older, so you’ll end up paying more over time for renewable coverage than for a single plan. You can always choose not to extend your coverage if you’d prefer to buy a different policy or if you simply don’t need insurance anymore.

Reaching the end of your term life coverage can be nerve-wracking, but you can prepare ahead of time to ensure that you’re covered, no matter what. Keep the end of your term length in mind, even if it’s a long way off, and talk to a life insurance company about your options at least six months beforehand so you aren’t caught by surprise.

Still have questions?

At Fidelity Life, we’re committed to getting you the life insurance coverage you need exactly when you need it. If you plan to renew it or buy a different policy, we can walk you through every step of the process.

Give us a call to talk to one of our agents or start your online quote today.

At Fidelity Life, our goal is to make life insurance simple, affordable, and understandable for everyday families. This content is intended for educational purposes only. Each post is carefully fact-checked, reviewed, and updated regularly to ensure the information is as relevant as possible.