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What to Do with Your Term Life Insurance at the End of Term?

The best time to purchase a term policy is in your mid-twenties. This is when you have growing responsibilities and dependents. Your term policy will ensure that your family members are financially secure in the event of (god forbid) any uncertainty.
Moreover, it is crucial to remember details such as the expiry date to get the most out of your term insurance policy.

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Hence, once your policy expires, you will no longer receive the policy benefits. Keep reading this article till the end to understand what you can do with your term life insurance at the end of term. 

Note: Know more about what is term insurance first before reading this article.

What Does Happen to Term Life Insurance at the End of Term?

As you approach your term insurance expiry, two cases are possible:

Case I: When you outlive the term and do not need coverage

You don't likely need life insurance if your loved ones are no longer in need of your financial assistance. In such cases, you can let your policy lapse. It is simple - your coverage ends when your plan ends. However, if your policy expires on the day you die, no death benefit will be available to your family.

Can you encash your term plan?

Term life insurance has no cash value, unlike whole-life insurance policies. If you haven't purchased a return of premium term life insurance, you won't be able to get any refund for the policy being lapsed.

Case II: When you outlive the term and need coverage

You will need insurance coverage if you have financial responsibilities or dependents who look up to you. Moreover, this is a chance to switch to a policy that better suits your needs. You can also decide upon the coverage. Although you technically cannot extend your existing term life insurance policy, you can convert it into a permanent policy or purchase a new policy.

Many term life insurance policies include a term conversion rider that allows you to convert your policy to permanent coverage when the term ends. Ask your policy provider to confirm if your policy contains a term-conversion rider. Such term conversions come with a significant advantage. 

This allows you to skip the physical exam and retain your original insurance classification even though your health has deteriorated. You will also be able to avoid paying higher term life premiums for seniors. 

Also, note that permanent insurance can be several times costlier than term coverage. Note that you must change your policy while you have it active to be eligible for the term conversion rider. To avoid missing out, start the process in your last year of the term.

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What to do When Your Policy Reaches Expiration Date?

To avoid missing out on your term insurance benefits , here is what you can do to continue being eligible for the plan benefits:

  1. Extend your insurance

    Term insurance policies typically have a lengthy tenure. This implies that you can keep your policy active by continuing to pay premiums. If you only need your policy to be active for two or three more years, extending your insurance can be a good option. If you prolong the tenure, however, your premiums will increase as you get older.

  2. Renew your insurance

    This option is the most practical. You can now renew your insurance online, which is a faster and more hassle-free option than ever before. Or, you can do it offline. 

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Final Word

It is advisable to stay active in your decision-making in the final year of your term plan. See if you still need the coverage. Based on your life requirements, check with the insurer to see what can you do with your term life insurance at the end of term. There is no logic in putting your money to buy another insurance if you don't need it when your current policy expires.


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