Whether it's your favorite chocolate pie, dream vacation or honeymoon, every good thing eventually ends. The same principle also applies to your Term Life Insurance policy.
Most term policies last for 10 to 30 years. Check your policy or talk to your agent to see how long of a term you chose when you purchased your policy. If you die before the policy expires, your beneficiaries receive the death benefit. If the policy expires before you do, you will no longer be covered — and that's when you need to decide your next move.
Convert the policy
Many term policies issued in recent years include an option to convert or exchange the term coverage to a permanent life or universal life policy. Depending on the insurer, you may be able to convert the entire policy before it expires, during the first five years the policy is in effect, or before you reach a specified age (commonly around 70).
Converting can be a smart move if your health has declined and would prevent you from obtaining a new permanent policy. Keep in mind that conversion is typically more expensive than term coverage and may not be available on every term policy.
Extend the policy
Read the fine print on your term policy to see if you can pay the premiums each month and keep your current coverage until an advanced age, sometimes as late as 95. This option can be useful if you only need coverage for a few more years or if you are older and cannot qualify for a new policy because of health concerns.
However, premiums for an extended or extended-term option usually increase substantially over time, so it’s a poor choice if you cannot afford the steep annual increases.
Renew the policy
When your term policy expires you can apply for a new one. Use your current insurer's exchange or re-entry provision, or select a different company. For help comparing offers, consider reviewing Competitive Term Life Insurance options to see what fits your needs.
To qualify for a new policy you'll generally need to show that you are in good health, and in most cases a new term policy is affordable if you are under 60. If your health has declined, you may be denied coverage or charged a much higher premium.
Even if your term policy has expired or is close to expiring, you have options. Check into these three choices, talk to your agent for more information, and shop around for the best policy for you.
Frequently Asked Questions
Can I convert my term policy at any time?
Not always; conversion rights depend on the policy and insurer and often have time or age limits, so review your contract or contact your insurer.
Will converting to a permanent policy cost more?
Yes—permanent policies generally have higher premiums than term coverage because they include a cash value component and lifelong protection.
What happens if I can’t qualify for a new policy when my term ends?
If you cannot qualify for new coverage, conversion (if available) or an extension may be your remaining options, though both can be more expensive.
Is it cheaper to renew with my current company?
Sometimes renewing or using a re-entry provision with your current insurer is convenient, but it’s wise to compare offers from multiple companies before deciding.