If you own a life insurance policy, or are considering the purchase of life insurance, you may be wondering if your coverage will ever end, and if so, when.
Yes, a life insurance policy can expire.
Some term life insurance policies will expire at the end of the policy term, while others will go into years of annually renewable term coverage, which means the premium will increase each year, before the policy expires.
Term life insurance plans do expire, and it’s important to keep up with your regular premium payments to continue your coverage. Since in a term insurance contract, there is no cash accumulation that builds up inside the policy, if the insurance premiums are not paid, the term policy will be canceled (expire) for non-payment of premium.
In a Permanent life insurance policy, it may be possible to have the coverage continue without premium payment, by an automatic premium loan provision, or other means.
You need to check with your insurance agent about the terms and conditions of your particular life insurance policy.
Permanent insurance will not expire if it is set up to last until death at any age, and if all policy premium payments are on time with no unpaid loans.
However, some permanent life policies are set up to expire at a certain time.
What Happens When My Term Life Insurance Policy Expires?
If, for example, you selected a 15-year term life policy, the policy expires 15 years after it went into force.
If you outlive the duration of your policy term, your beneficiaries won’t receive a death benefit and you won’t receive any money in return, unless you have a "Return-of-Premium" term life policy.
What are the Terms of Term Life Insurance?
Term life insurance is simple to understand — you select a death benefit amount and a "Term", or Length of Time the policy will be In Force, providing you with life insurance coverage.
Terms can be as short as one year or as long as thirty years.
Many insurers offering term life policies with a Term of 10, 15, 20, 25, or 30 years.
If you pay your premiums on time and die while the policy is In Force, your named beneficiary (ies) will receive the death benefit from your insurance policy.
When Does Life Insurance End?
Whole Life Insurance policies end when death of the insured person occurs, or when the policy matures (typically at age 100).
At either time, the full amount of the death benefit is paid (when the policy matures, you are actually receiving the cash value, which becomes equal to the death benefit, called "Endowment").
For Term Life Insurance, the policy ends (or goes up in price to what is usually an unaffordable cost) at the end of the policy term.
Therefore, someone who is 45 years old and takes out a 15-year Term Policy will have to find a new policy at age 60, if life insurance coverage is still needed when the current policy expires.
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