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The information on this site does not modify any insurance policy terms in any way. Term life insurance is purchased for a specific amount of time — usually 10, 20 or 30 years. If you outlive your term policy, your policy will end, and you will no longer have coverage. If you still want life insurance after your term policy ends, you may have the option to buy a new life insurance policy or consider a term conversion policy. While term coverage is often purchased assuming that any dependents will be grown and financially independent by the time it expires, that is not always the case.
Generally, when term life insurance expires, the policy simply expires, and no action needs to be taken by the policyholder. A notice is sent by the insurance carrier that the policy is no longer in effect, the policyholder stops paying the premiums, and there is no longer any potential death benefit. If the policyholder had a return-of-premium policy, a check would be sent for the amount paid into the policy throughout its term. The exception is if there is a term conversion rider on your policy, which allows the policyholder to convert the term policy to a permanent insurance policy as you near the end of the term without going through the underwriting process again.
This option may be worth considering for people who need coverage but whose health has declined and who do not want to have a medical exam. Those who will need further coverage after the term policy expires may want to start evaluating other options six months to one year before the policy expires.
With this option, the policy is switched to a permanent life policy as dictated by the policy documents. Term conversion policies may come with higher rates, but they allow the insured the option to maintain coverage after their term ends. For many people, converting rather than purchasing a new policy may be cheaper. For the relatively young who are in good health, the most inexpensive life insurance option might be to purchase a new term policy.
Premium costs may also go down if a much lower death benefit and a shorter term are purchased, which may be a good option for people who need less coverage than when they purchased their initial term policy. For example, for someone whose youngest child is still in high school when their year term policy expires, an additional ten-year policy may be sufficient to ensure that their dependent has completed college and no longer needs financial support from the estate.
Keep in mind that a medical exam will likely be part of the underwriting process for any new term policy, and if there are new health issues since the first policy, the rate will likely increase.
For example, some companies will let you convert to a universal life policy but not a whole life policy. There will be a specific deadline as well: some insurers let you convert at any point during the term of your policy; others may only let you do so during the first few years of coverage, or until a certain age.
Think about how your life has changed. Or maybe you have a bigger family and need more. The type of policy that was right for your needs 10, 15, or 20 years ago may not be the best choice for your current needs today. This can be an opportunity to fix that. The insurance company, however, can and typically will raise your premium. A portion of your premium dollars are invested, and this sum grows over time.
If you are still in good health and want a substantial level of coverage as opposed to limited final expense coverage you can shop around for a new term-life policy. If you want to extend or convert your current term policy, talk to your life insurance company, agent, or broker well before it expires. A good place to start: get an instant quote from Guardian using our calculator. If you have an agent or financial professional, you can also speak with them. Another option is to check with your HR department to see if group term life insurance coverage is available through your company.
While the benefit may be limited, it could be enough for your current needs — and the rates will likely be attractive. Combining a permanent whole or universal policy with a term policy can be one way to get the higher death benefit and additional coverage you need for a limited period of time — for example while your children are still at home.
Guardian can help you calculate how much coverage you may need and give you an instant quote online — or we can put you in touch with a financial representative who can provide a more detailed estimate of your needs.
That is an option that many older people choose, because a whole life policy can be a tax-advantaged estate-planning tool. However, the premiums can be higher than they would be for a term policy with the same death benefit.
If you die during that period, your beneficiary will receive a payout; if you die after the policy has expired, they will receive nothing. So what should you do if your term expires and you still need life insurance? The principal purpose of life insurance is to provide financial support for your dependents should you die prematurely.
For example, someone might buy a year term policy at age 40, figuring that by the time they reach 70, their kids will be grown up, out of the house, and self-supporting.
The disadvantage is that it eventually comes to an end, at which point the policyholder, now older, may find it difficult to buy another policy. For many, probably most, policyholders this is not a problem. However, suppose that our hypothetical year-old with a year term policy is approaching age 70 and still has dependents.
Or perhaps the policyholder is now responsible for the support of a grandchild or two. In such cases, the policyholder might want to try to keep some life insurance. So what exactly are the options?
The COVID pandemic has reportedly caused many insurers to reevaluate their life insurance products for older people, who are more vulnerable to dying from the disease. So until the pandemic ends, you may have fewer options or encounter higher prices than you would otherwise. Here are some steps to consider. Many term policies have a guaranteed renewability provision that allows you to keep your insurance in effect after the end of the original term, as long as you continue to pay the premiums.
Some policies allow you to renew on this basis up to age 95, assuming you can afford to. Your term policy may also include a provision for converting to a whole life or universal life policy, again without a physical exam. The new insurance policy could continue for the rest of your life or for as long as you need it.
The premium on your new policy will be higher than you have been paying for term insurance, but you may have the option of converting to a policy with a smaller death benefit in return for a lower premium if that works best for you. Some insurers write policies for people up to the age of Research the available policies to find the best term life policy for you.
If you have health issues that make it difficult for you to buy a sufficiently large term insurance policy, you may still be able to cobble together a portfolio of smaller policies that will add up to what you need. These policies may not require a physical exam, but they may ask for some health information.
Some insurance companies submit your name to a company called MIB Group, which reports back the number and coverage amount for other policies you have. If the insurer believes you are applying for more insurance than you would reasonably need, it may deny coverage. Still another option is final expense or burial insurance. They may require no medical exam and—despite their grim name— will provide money that your beneficiaries can use for any purpose they wish.
If you have a term life insurance policy that is due to expire in the near future, the first question to ask yourself is whether you still need insurance.
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