What Happens When Your Term Life Insurance Expires: Everything You Need to Know

Shawn Plummer

CEO, The Annuity Expert

Have you ever wondered, “What happens when my term life insurance expires?” or “Do I get my money back after term life insurance expires?” If so, you’re not alone. The world of term life insurance can seem complex and overwhelming, especially when understanding what happens when the term ends. So, let’s clear the confusion and make this as simple and understandable as possible.

Understanding Term Life Insurance

Term life insurance is a policy that offers coverage for a specified “term” or period – typically 10, 20, or 30 years. Term life insurance protects your beneficiaries financially if you pass away during this period. But, an inevitable question arises, “what happens to term life insurance if you don’t die?”

When the term expires, several things can happen depending on the specifics of your policy. So, let’s explore these possibilities.

Term Life Insurance Expires

What Happens When Your Term Life Insurance Expires?

In most cases, when your term life insurance policy expires, you essentially become uninsured. If something were to happen to you after the policy term, your beneficiaries would not receive any death benefit. The coverage ends, and you’re no longer paying premiums.

It’s a little like renting a house. You pay rent to live in the house, but at the end of the lease, you don’t get your rent back, and if you wish to continue living there, you have to renew your lease. Similarly, if you want to maintain your coverage after your term life insurance expires, you may have options to renew your policy or convert it to a permanent policy. It’s important to note that term life insurance and tax matters are separate. While term life insurance is not typically taxable, it’s advisable to consult the IRS or a tax professional for specific guidelines regarding your situation.

Do You Get Money Back After Term Life Insurance Expires?

This is a common question, and it’s essential to address it upfront. Standard-term life insurance policies do not offer a return of premiums at the end of the term. So, if you outlive your term life insurance policy, you generally do not get any money back unless you have a return of premium (ROP) term life insurance policy.

An ROP policy, while typically more expensive, promises to refund all your premiums if you outlive the policy term. It’s a nice safety net for those who want to ensure their money isn’t ‘wasted’ if they outlive their policy.

What Age Does Life Insurance Expire

At What Age Does Term Life Insurance Usually Expire?

The expiration of your term life insurance policy is not really about how old you are but more about the term you chose when you bought the policy. If you took out a 20-year term life insurance policy at age 30, it will expire when you’re 50. But there are age-related factors that can affect the terms available to you. Typically, it’s challenging to find term life insurance policies that extend past the age of 80.

Does Term Life Insurance Expire at a Certain Age?

While term life insurance does not automatically expire at a certain age, age can impact the terms available to you. Generally, the older you are, the shorter the term you can select. Also, premiums for term life insurance tend to increase significantly with age, especially if you’re looking to renew a policy or convert to a permanent one.

Next Steps

Remember, thinking about life insurance is never too early or late. Consider your options, seek professional advice, and choose the best course for you and your loved ones. Life is full of unexpected twists and turns, but with the correct term life insurance, you can ensure you’re prepared for whatever lies ahead.

At What Age Should You Stop Term Life Insurance

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Frequently Asked Questions

What happens when my term life insurance expires?

When your term life insurance expires, the coverage ends, and you are no longer protected. You must either renew the policy, convert it to permanent life insurance, or seek alternative coverage.

Do I get my money back after term life insurance expires?

No, you do not get your money back after term life insurance expires. Term life insurance is pure protection; if you outlive the policy, there is no cash value or return of premiums.

At what age does term life insurance usually expire?

Term life insurance typically expires at a predetermined age, such as 65 or 70. However, specific expiration ages can vary depending on the policy and terms the insured chooses.

What happens to term life insurance after 20 years?

After 20 years, a term life insurance policy typically expires, and the coverage ends. The insured can renew the policy, convert it to permanent life insurance, or seek alternative coverage.

Shawn Plummer

CEO, The Annuity Expert

I’m a licensed financial professional focusing on annuities and insurance for more than a decade. My former role was training financial advisors, including for a Fortune Global 500 insurance company. I’ve been featured in Time Magazine, Yahoo! Finance, MSN, SmartAsset, Entrepreneur, Bloomberg, The Simple Dollar, U.S. News and World Report, and Women’s Health Magazine.

The Annuity Expert is an online insurance agency servicing consumers across the United States. My goal is to help you take the guesswork out of retirement planning or find the best insurance coverage at the cheapest rates for you. 

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