What Happens When My Term Life Insurance Policy Ends?

You have a number of options when your term life insurance expires. You can extend, convert, or renew your policy.

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Tim is a licensed life insurance agent with 23 years of experience helping people protect their families and businesses with term life insurance. He writes and creates stuff for QuickQuote and other insurance and financial websites. You can find him on Twitter.

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UPDATED: Aug 19, 2020

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You have a number of options when your term life insurance expires. You can extend, convert, or renew your policy. Learn what happens when term life insurance expires. You may have a term life insurance conversion provision to convert term life insurance to permanent life insurance or renew your term life insurance. Be sure to understand the life insurance renewal process and how long your term life insurance policy will last before purchasing.

“All good things must come to an end.”

This modified ancient English proverb dates back as far as 1374. And sadly, it applies to modern-day term life insurance policies as well. Sort of.

If you’ve recently come to the end of your term life insurance policy — congratulations! You’ve outlived your policy. The best type of term life insurance is the kind you never end up using but is there if you and your family need it.

As you may know by now, term life insurance doesn’t always “expire” at the end of the term period. What does expire, however, is the low rate you’ve been paying. The term period is set when you purchase the policy and typically lasts for 10, 15, 20, 25, 30, 35 or even 40 years. After that, you can usually continue the policy on a year-to-year basis to age 95, but at a much higher cost.

So Now What?

Well, that depends on your life insurance needs. Even though your term period has expired, your policy may still have value to you. If you find that you still need life insurance protection at this point, you do have options for extending, converting or renewing the coverage.

Extending Your Coverage

Most term life insurance policies do not technically expire until the Insured reaches age 95. This means you can keep your existing policy in force by continuing to pay the premiums. Learn what happens if you don’t pay your life insurance premiums.

Pros – This option may be worthwhile if you find you need the coverage for a short period, say 2-3 years. Also, this may be a good choice (or your only choice) for a no exam life insurance policy if you cannot qualify for a new policy due to a change in health.

Cons –  The cost to keep the policy in force will increase – significantly. And it will continue to increase each year as you age. Check your policy for a page that shows the estimated annual premiums for the policy term and the years that follow.

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Converting Your Coverage

Nearly all term life insurance policies issued today include a conversion option, also called an exchange option. If your policy was issued more than ten years ago, be sure to check if it includes this option.

This option allows you to convert your term life policy to a permanent life insurance policy, typically a Universal Life (UL) policy. Most companies have select UL policies available for conversion. Some companies, such as MetLife, allow conversion to any UL policy in their portfolio. Be sure to check with your insurance company to see which policies are available for conversion.

Conversions guidelines vary by the life insurance company. The most common are:

  • Entire Term – This allows you to convert your policy at any time during the policy term (BEFORE expiration).
  • Period –  This allows you to convert your policy for a certain period – say, the first five years of the policy term.
  • Specific Age – This allows you to convert your policy up until a specific age, typically age 70.

One of the most important things to remember about conversion is you need to begin the process before your term expires. It’s best to start looking at policies and costs at least a year in advance. This will help you keep your options open at the policy end draws near.

Pros – Clearly, the biggest benefit of conversion is that you do not have to provide evidence of insurability to convert to a permanent policy, provided the coverage amount remains the same or less. In other words, you do not need to show good health as you did when you first bought your term life policy. So, no application and no exam! That makes conversion the go-to option for people who need the continued coverage but have developed severe medical conditions or are otherwise not in good health.

Cons – Some life insurance companies limit the number of UL policies available for conversion. So you may not necessarily get the features you would like in a permanent policy or the best available policy. You may also have to pay more than you would for a non-eligible UL policy.

Speaking of paying more, your new permanent policy will be more expensive than the term life policy you had. The new policy rate will be based on your age at the time of conversion. Plus, permanent life insurance policies simply cost more than term life policies. However, the cost may still end up being lower than the cost to continue your term life policy on a year-to-year basis. So make sure to check the rates for both options.

Renewing Your Coverage

Usually, the least expensive option for keeping your life insurance coverage in force is to apply for a new term life policy. You can either apply to the same company utilizing their Exchange or Re-Entry provision, or you can choose a different company. There are no clear advantages to staying with the same company, as both applications will likely require an in-home life insurance exam to show you are still in good health (understand what to expect from a life insurance medical exam). We always advise people to shop around for the best rate, just as you did 10, 15 or 20 years ago.

Pros – This is almost always the least expensive option, especially if you are under age 70.

Cons – You have to prove you are still in good health (insurability). If your health has deteriorated, you may lose out on the cost savings or be denied coverage altogether.

So the three most likely options for you to continue coverage when your existing life insurance policy ends are:

  1. Extend the policy on a year-to-year basis – Expensive, but a simple way to keep your coverage going.
  2. Convert the policy to a permanent policy – Expensive, but you can get lifetime coverage even if you are in poor health.
  3. Start a new term policy – Less expensive, but you must be in good health to qualify for a low rate.


Keep these options in mind as your term life insurance policy draws to a close. Remember to consult with your life insurance advisor at least a year in advance, and together make an informed choice!

Renew Your Term Life Insurance Policy

All term life insurance applicants must ultimately choose the policy term when applying for coverage. However, what seems like a simple decision often turns out being difficult for many. Most term life insurance policies offer policy terms or term lengths of 10 to 30 years. Knowing how long coverage will be needed is the challenging part for most people.

Regardless of the term length selected, it is important to make sure the policy contains a guaranteed renewable provision. A term life insurance policy’s renewability provision is arguably its most important feature. The provision allows the policy owner to renew the policy at the end of the policy term, without proving evidence of insurability again (i.e. no new medical exam). This can be done annually, typically to age 95 or so (varies by company).

The obvious advantage of the renewability provision is the policy can be extended, even if the insured is in poor health. Suppose you, as the insured, have been diagnosed with a serious medical condition during the term of your policy. When the policy expires, you may no longer be insurable; which is to say you could not be approved for a new policy. However, you may still need the coverage. Perhaps you originally chose a ten-year term, but now you need a twenty-year term due to the birth of another child. The renewability provision would allow you to extend the coverage despite your current medical condition.

The primary disadvantage to extending the policy beyond the original policy term is the cost. Once the policy term ends, the guaranteed or level premium rate you have been paying ends as well. There is little doubt the insurance company will charge a higher premium each year you choose to renew the policy beyond the original policy term. Most term life policies list the current and maximum renewal premiums in the policy.

So let’s recap the renewability provision:

  • The insurance company guarantees they will renew the policy annually at the end of the original policy term.
  • No new evidence of insurability is required.
  • The policy automatically renews provided the renewal premium is paid on time.
  • This allows an otherwise uninsurable individual to keep their life insurance coverage in force.

Please do not confuse this provision with re-entry, which is entirely different. Your questions/comments are welcome as always!

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Term Life Insurance Renewal Process

All good things must end. Here’s what to do when your policy’s time is up.

Most modern term life insurance policies do not expire until you reach age 95. Even though you may have a 10-year term life policy, your coverage will not end after ten years. What does end, however, is the “rate guarantee” on that policy.

The rate guarantee is what keeps your cost from increasing during the policy term. If you have a 10-year term policy, for example, the rate guarantee will expire in year eleven, and your cost will go up — if you decide to keep the policy. More on that later. And not only will the cost go up, but it will also likely go way up!

Here’s an example of what the scheduled premiums may look like for a 10-year term life policy. A similar table will be included in your policy.


You can see how dramatic the increases can be. But remember, you’re not obligated to pay the higher rates. You have options, and here they are.

Your Life Insurance Renewal Options

When your policy term expires, you will get a renewal notice from the life insurance company that states the new premium for the policy. At that point, you’ll need to decide whether to keep the coverage or let it go. Your decision will likely come down to two factors: (1) your health condition (a.k.a insurability) at that time, and (2) do you still need life insurance coverage.

First, we’ll assume you are in good health and can still get approved for life insurance. In this case, your options are:

Buy a new term life policy.

This is almost always (as in greater than 99% of the time) less expensive than keeping your existing policy.

  • Pros: Less expensive; you can lock in a new rate guarantee.
  • Cons: Requires a new application and exam; you must satisfy a new 2-year contestability and suicide period.

Keep your existing policy.

This is almost never a good idea if you can get a new one, but it is an option if you don’t want to bother with a new application.

But what if you are not in good health?

Your options will be more limited, but you still have some.

Keep your existing policy.

Remember, you’re no longer insurable due to changes in your health. If you decide you still need the coverage, you may have to endure the higher cost to get it.

  • Pros: You do not need to prove insurability again; you can keep coverage going.
  • Cons: Expensive; no rate guarantee means the cost will continue to increase each year.

Convert your policy to a permanent one.

Your policy “may” be convertible to a universal life or whole life policy. Make sure you contact your agent or the life insurance company before the term expires. Often these conversion privileges expire at some point, but almost always before the end of the term.

  • Pros: Conversion does not require you to be in good health; you don’t need to complete an exam; you can secure lifetime coverage with a permanent policy.
  • Cons: Conversion is expensive; expect to pay much more than you were paying for your term policy, but possibly less than the renewal rates to keep it.

Your Renewal

When your policy reaches the end of the term period, we’ll be here to help. Here’s what we do for you at renewal time:

  • We send you rates for a new term life policy so you can compare them to your renewal rates.
  • We can also show you how conversions work and what it would cost for you to convert your policy.
  • Help you with a smaller term policy (amount or length), help to convert a portion of your existing policy, or a combination of both.

How Long Should Your Term Life Insurance Policy Last?

You already know you need term life insurance. And you may have even figured out how much you need as well. That’s all you have to decide, right?

Not so fast.

The type of life insurance and the coverage amount are certainly two crucial choices to make. Congrats for making them, by the way.

But you’re not done. In fact, arguably the most important choice to make remains. And that is the policy’s term length.

In other words, how long do you need this term life coverage to last? You see, term life eventually ends. Well, technically it doesn’t end until age 95. But at the end of the term period, the price shoots up so high (think 10 – 20 times higher, or more) that most people let it expire. It’s true. I see it every day.

That’s why it’s imperative to get this part right. Because if you race past this question without much thought, you’re likely to find yourself regretting your haste ten or fifteen years from now. Go too long, and you’ll pay more than you should have. Fall short and, well, you could be left with no coverage when you need it.

Available Term Periods (Lengths)

You can buy term life insurance for term periods of 10, 15, 20, 25 or 30 years. As I mentioned earlier, most modern term life policies do not technically expire until age 95, regardless of the term period. The term period simply locks in the policy cost for that specific time.

So if you buy a 10-year term policy, your rate will not increase for ten years. However, once the term period expires in year eleven, the rate guarantee is gone, and the cost will go up significantly.

The longer the term period, the higher the cost. So 30-year is more expensive than 20-year, which is more expensive than 10-year. The reason is simple:  you’re paying for a longer rate guarantee. Naturally, that is going to cost more.

Some life insurance companies offer a term period as short as one year, sometimes called Annually Renewable Term (ART). These policies can be renewed for one-year intervals, hence the name. However, these policies are not always cheaper than say, a 10-year term policy, because the life insurance company has to recover all of it’s costs right up front. Longer policies allow them to spread these costs out over many years.

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How do You Figure Out How Long You’ll Need It?

It shouldn’t take an advanced math degree to solve this problem. You don’t need an abacus, compass or fancy calculator. All you need is a simple formula. Grab a pen and write down the answers to these questions:

  • How many years until my youngest child is no longer dependent?
  • How many years until my mortgage is paid off?
  • How many years until my spouse and I retire?
  • How many years until my other long-term obligations are gone?

Your answers might look something like this:

8 years, 14 years, 18 years and 10.

Use the largest number of years and select a policy for that time frame. A 20-year policy works best in this example, as it provides coverage until all – or most – of your long-term obligations are met.

Keep in mind this is a starting point and not necessarily the final answer. Your situation may justify a shorter or longer policy. For example, you may have another policy or coverage through work that could cover some of these obligations. Or you may have other needs not listed here that take you out longer than 20 years.

Layering – A Lost Art

Another option for selecting your policy’s term length is to layer multiple policies together to cover your needs. Think about it; you’re needs are likely to change gradually over time. Children grow up and move out. Mortgages eventually get paid off. Retirement – although it may not feel like it sometimes – gets closer every day. You get the idea.

Well, layering allows you to systematically reduce your life insurance coverage over time as your needs change and your ‘obligations’ start supporting themselves.  It can be a very effective strategy that can save you a lot of money over the years. I’ve seen some families save 25% or more on the cost of a single policy.

What Happens if I Pick the Wrong Term Length?

If you choose a term length that is too long, you can always simply cancel the policy when you realize you no longer need it. The biggest penalty for this is you’ve likely paid more over the life of the policy then you should have. So it cost you some money. Stinks yes, but not the end of the world.

Ending up short, however, is a different story. Let’s say your 15-year term is nearing its end, and you realize you need it for another six or seven years. You know the premium is going to skyrocket in year sixteen, and you won’t be able to afford it. Here’s how it’s likely to play out:

Best Case Scenario

You’ve taken care of your health and danced a little with Lady Luck along the way. You can still qualify for coverage at a good rate. So you let the policy expire and you buy another one. It will cost more than the last, but not nearly as much as keeping that old one.

Worst Case Scenario

Time hasn’t been so good to you, or you haven’t been so good to you. Either way, you can’t qualify for a new policy now because of health issues. This is where the rubber meets the road, and you have a tough decision to make. You can keep the old policy and pay the higher rate, or go without.

But wait — there may be another way.

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Conversion is Your Salvation

I like to refer to term policy conversion as the ultimate do-over. You can think of it as a ‘Plan B.’ If you mess up and choose a term length that ends up being too short, you may be able to convert the policy to a permanent policy, even if you’re no longer the picture of good health that you were ten years ago.

With term policy conversion, you do not need to show evidence of good health. Most policies are convertible to a permanent policy from the same company with the same life insurance rating class, which is determined by underwriting guidelines (see guidelines here: life insurance underwriting guidelines) you got on the original policy. Meaning, you could keep your preferred rate even if you’re in bad shape.

But conversion is not cheap. Permanent life policies are expensive compared to term life. And you’re older now, so that won’t help matters. But if you’re in a pinch, it may be a viable option.

Remember to consider the term length for your policy very carefully from the get-go. Discuss it with your agent. Think about all of the what-ifs. Plan now for success later.

Term Life Insurance Conversions

A term life insurance policy covers you for a specified period, depending on the term length you chose when you bought the policy. Most insurance companies offer 10, 15, 20 and 30-year term policy options. There may come a time in your life when you decide that a term policy is no longer sufficient for your life insurance needs. However, you may no longer be insurable and able to obtain a new policy.

Most term life insurance policies automatically include a conversion option, which is the option to convert your term policy to a permanent life insurance policy, within policy specifications. The conversion option is a valuable addition for many reasons, and if you are in the market for a term life policy, you should check to be sure it includes this option. Here we discuss some key points to help you understand how conversions work.

Conversion Options

Insurance companies that provide the conversion option with their term policies will provide at least one permanent product to convert to. Usually, it will be universal life or whole life. Read about these types of life insurance. Some companies allow conversion to any of their permanent products. Have your agent compile a list of options for you when you are considering making the switch.

It is important to note that insurance companies may change products over time, so a product that is available for conversion today may be discontinued in the future.

The conversion deadline will be listed in your policy, and this is the absolute deadline for converting your policy to a permanent plan. Most insurance companies do not offer a grace period on this time limit. If you intend to convert your term policy, allow plenty of time for the conversion paperwork and processing.

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As you may have guessed, permanent life insurance is quite a bit more expensive than term life insurance. Whole life is meant to provide coverage until age 100 or beyond, so it is understandable that it will be more expensive than a term policy. Depending on the type of policy converted to and the age at which converted, you may be paying several times more than you paid for your term policy.

Often people will want to know the exact price they will be paying if they convert their term policy to say, universal life in 10 years. Your agent will only be able to give you a rough estimate because insurance companies are constantly changing their rates. The price for a 50 or 60-year-old today will not be the same as it will be for a 50 or 60-year-old ten years from now.

The price that you will pay for your newly converted policy depends on the age at which you decide to make the conversion. The younger you are, the less expensive it will be. This does not necessarily mean that you should jump the gun and convert your term policy too soon. Talk to your insurance agent and a financial advisor to be sure that a permanent policy is right for you before converting your policy.

Partial Conversion

If you are not quite ready to part with your term policy, but you want to take advantage of your conversion option, most insurance companies will allow you to convert only a portion of your coverage to permanent life insurance. There is a lower limit, such as $50,000, but this varies by company.

Real Life Example

Bradley applied for a term life insurance policy at age 62. He was approved at the preferred plus rating class for a $250,000, 10-year term life policy for which he paid $500.00 per year.

Two years later, Bradley was diagnosed with major heart issues for which he needed surgery. During this time, he realized that his 10-year term policy (now two years old) was no longer sufficient to protect his loved ones. Bradley applied to countless different insurance companies trying to get a new term policy but was unable to be approved due to his recent heart problems.

He was ready to give up but then remembered that his current term policy had a conversion option, which meant that he could convert all or part of his existing policy to a permanent plan with no evidence of insurability. At age 64 he was still within his policy’s conversion period, so he set out exploring the products available by his company for conversion. After much deliberation, he settled on a partial conversion to a cash value universal life policy. He converted $100,000 worth of coverage and was able to maintain his preferred plus rating class. The pricing on his new policy was $2,400.00 per year.

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Things to Remember

  • Conversion rules and options differ from company to company.
  • Permanent life insurance is very different from term life, so make sure you fully understand it before making a conversion.
  • Often conversions are not reversible, so once done you can not convert back to your term policy.
  • Find an experienced agent who is willing to go over all aspects of your new policy before conversion.

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