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HomenewsHow to Proceed When Your Term Life Insurance Policy Expires

How to Proceed When Your Term Life Insurance Policy Expires

You likely have a few questions about what to do if you purchased term life insurance more than ten years ago and it is about to expire.

After all, in the last ten or twenty years, your life has probably changed significantly. What kind of defense does your family currently require? Can you—and ought you—extend your current policy?

What Happens When Term Life Insurance Expires and How It Operates

A term life insurance policy is what? Just as its name suggests: A life insurance contract that offers protection for a predetermined term or length of time, usually between 10 and 30 years.

While universal and whole life insurance policies offer permanent protection with a cash value element1, a term policy is a pure life insurance product created simply to pay out to your beneficiaries if you die away within the term.

When the term of your policy expires, you might choose to forego life insurance altogether. Some people opt for such alternatives, particularly if their kids are grown up and self-sufficient in money and they have adequate savings to care for their spouse or partner.

However, you have three fundamental options if your family still requires the financial security provided by life insurance:

1 – Extend Your Current Insurance

In theory, you are often able to continue renewing your insurance every year until you are 95 years old.

This is due to the assured renewability feature that allows you to renew your coverage and current death benefit without undergoing a new underwriting procedure and a new medical exam.

In contrast, if you prolong, the insurance company will alter your premium. For most people, this might not be the greatest option, even though it can make sense for some. (We’ll go into further detail in the part below.)

2 – Change Your Term Insurance to a Permanent Coverage

Many of the term life insurance policies available today have a conversion option or rider that enables you to change your term policy into a permanent policy without providing proof of your insurability (i.e., getting a new medical exam).

You should review your policy to determine your options because different insurance companies handle term-to-permanent conversion in a variety of ways.

For instance, some firms will allow you to convert to universal life insurance but not a whole life policy.

How to Proceed When Your Term Life Insurance Policy Expires

There will be a deadline as well; some insurers permit conversion at any time during the policy’s duration, while others may only permit it in the early years of coverage or up to a specified age.

This might be a tempting choice, but you should start the conversion procedure at least a year before your policy’s specified conversion deadline.

3 – Purchase a New Life Insurance Policy

Consider the changes in your life. You might not require the same level of life insurance coverage if you have more savings. Or perhaps your family is larger and you require more.

The kind of coverage that met your needs 10, 15, or 20 years ago might not be the greatest option for your needs right now.

It may be possible to correct it now.

Pros and Drawbacks of Extending Your Current Term Policy

The assured renewability clause of your policy may be extended if the coverage sum on your current term insurance is still appropriate for you (if your policy has such a clause). However, the insurance provider has the option to do so and usually will.


Because a term policy’s assured renewability provision may be the only means of maintaining life insurance in the event of a change in health, some people may think about using it.

A person might not be eligible for a new policy that provides a sizeable death benefit if they have been given a terminal or life-shortening diagnosis.

Extending term insurance may be the ideal option for individuals who find themselves in this challenging circumstance if they want to give their family financial security.


As mentioned, after the period has passed, the insurance provider will usually increase premiums. Additionally, because the renewal is annual, subsequent years’ premium increases will typically be larger. This is only practical for a few years for a lot of people.

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Converting to Permanent Life Insurance: Pros and Cons

This might be a wise choice, but before discussing the benefits and drawbacks, it would be wise to review some of the distinctions between term and permanent life insurance.

The most noticeable distinction is that a perpetual policy, as opposed to one with a fixed duration of, say, 10 or 20 years, is intended to offer coverage that you cannot outlive.

Permanent (universal and whole) life policies, in contrast to term plans, don’t just provide “pure life insurance”; they also include a cash value component.

Your premium money is invested to some extent, and the amount does so with time. The cash value of your insurance can be used as collateral for loans, to pay premiums.


Even to be surrendered for cash to augment your retirement if it has grown to a sizeable sum. 2 The main justifications for considering whether or not to use the conversion option in your insurance are listed below.

How to Proceed When Your Term Life Insurance Policy Expires


There are no medical requirements or proof of insurability requirements when you switch from a term insurance policy to a whole life insurance policy.

Conversion may be the most cost-effective approach to obtain extensive long-term coverage if you have been diagnosed with a chronic condition that isn’t necessarily life-threatening because it can eventually be less expensive than a term policy extension.


For instance, you may live another 20 or 30 years if you have atherosclerosis and have had one or more stents placed in your coronary arteries.

At the same time, obtaining another life insurance coverage can be challenging or impossible (other than a limited final expenses policy).


You might only be able to choose from a small number of permanent insurance options. A universal life insurance policy, for instance, is a little more complicated than a whole life insurance policy.

Assuming the death benefit stays the same, the premiums will increase regardless of the type of permanent coverage you convert to. A method to reduce the expense, though, might be to switch to permanent insurance with a lesser death benefit.


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To Make Sure You Don’t Run Out of Coverage, Do the Next Step Right Away

Speak with your life insurance provider, agent, or broker well in advance of the expiration date if you want to extend or convert your current term policy.

Make sure to learn about the various life insurance policy possibilities, associated costs, and, if you’re considering conversion, what specific options are accessible to you.

Look into your policy and get in touch with the provider if you have a portable term life insurance policy that you purchased via your employer or if you’re unsure of who the financial agent or broker was.

Look around if you’re considering purchasing a new policy. Start by utilizing our calculator to obtain an immediate Guardian quotation. You may also chat with your agent or another financial expert.


Another choice is to inquire with your HR department about the availability of group term life insurance through your employer. The advantage might be modest, but it might be sufficient for your current needs, and the rates are probably favorable.


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