Term life insurance is one of those financial products that serves its purpose well—until it doesn’t. A term life insurance policy provides life insurance coverage for a specified period—usually 10, 20, or 30 years. If the policyholder survives the policy term, the coverage simply ends. But what happens when term life insurance matures?
Many insurance providers don’t make this clear upfront, and many term policies expire without policyholders realizing they need to take action. If your current term life policy is approaching its maturity date, you have a few coverage options to consider.
Do you extend term life insurance, switch to a permanent life insurance policy, or purchase a new life insurance policy? The right choice depends on your financial goals, health, and whether you still need financial protection for your loved ones – our team at BeneHub will walk you through your options.
Key Takeaways
- When a term life insurance policy expires, coverage ends, and no maturity benefits are paid unless action is taken.
- Options after term life insurance expires include renewing, converting to permanent insurance, purchasing a new insurance policy, or letting it lapse.
- Renewing may offer continued financial protection, but premiums paid will increase significantly due to age and health risks.
- Converting to whole life insurance or universal life insurance provides lifetime coverage but comes with higher costs.
- Letting your term policy lapse is only wise if you have sufficient financial security or no dependents relying on you.
- BeneHub helps policyholders navigate their life insurance needs, ensuring they find the right coverage options before their policy term ends.
Understanding How Term Life Insurance Works
The Basics of Term Life Coverage
A term life insurance policy is like renting an apartment. You continue paying premiums paid for a set period, and in return, the insurance company promises to provide coverage. If you pass away during the term length, your beneficiaries receive a death benefit. If you outlive the policy term, the insurance policy simply ends—no refund, no maturity benefits, and no automatic renewal.
- Coverage lasts for a specified period, such as 10, 20, or 30 years.
- If the policyholder survives, the life insurance policy ends with no payout.
- If the insured dies within the term length, the insurance company pays a death benefit to the beneficiaries.
- Unlike permanent insurance, term life does not accumulate cash value or maturity amount.
For those seeking financial security during their working years, term insurance is often the most affordable way to secure income replacement for their loved ones.
What Happens When Term Life Insurance Matures?
When a term life insurance policy expires, it means the expiration date has arrived, and the insurance company no longer provides protection. This can leave many policyholders scrambling to find continued financial protection—often at a time when they need it most.
Here’s what happens when term life insurance matures:
- Your existing policy ends, meaning you no longer have life cover.
- The insurance policy does not pay out unless you passed away during the set period.
- If you still need more coverage, you must explore new insurance options before it’s too late.
Many people assume their term policy will simply roll over, but that’s rarely the case. Many insurers offer renewal options, but they often increase significantly in cost. If you want to maintain continued coverage, you’ll need to act before your current term life policy expires.
Deciding What to Do When Your Term Policy Ends
Renewing Your Existing Policy
Some term life policies allow you to renew after the policy matures, but there’s a catch—it’s expensive.
Pros:
- No new medical exam required, which is great if you have a health condition.
- Ensures continued coverage if you still need financial support.
Cons:
- The cost can increase significantly, making it unaffordable for many.
- Renewals are usually year-to-year, with premiums rising each time.
Best for: Someone who needs continued financial protection but may not qualify for a new life insurance policy due to health issues.
Converting to a Permanent Life Insurance Policy
If your current term life policy allows conversion, this could be an ideal way to maintain lifetime coverage. Instead of letting your term life insurance expire, you can switch to permanent insurance like whole life insurance or universal life insurance.
Pros:
- No medical exam required, making it a great option for those with health issues.
- Offers lifetime coverage, along with a cash value component.
Cons:
- Premiums for a permanent life insurance policy are much higher than term insurance.
- The conversion window may be limited, so you’ll need to act before your policy matures.
Best for: Someone who wants a permanent policy but might struggle to qualify for new insurance due to a health condition.
Buying a New Life Insurance Policy
If you still need life insurance coverage but don’t want to renew or convert, shopping for a new life insurance policy might be the smartest move.
Pros:
- You can choose a fresh policy that better suits your financial goals.
- If you’re in good health, you might lock in a lower rate.
Cons:
- Requires a new medical exam, meaning your health will impact the cost.
- If you’ve developed a health condition, coverage could be pricier—or even unavailable.
Best for: Someone who is still in good health and wants to explore cost-effective life insurance products.
Letting the Policy Expire
For some people, the right move is to let their term life insurance policy expire. If you’ve built up savings, no longer have dependents, or have secured final expense insurance, continuing coverage may not be necessary.
Pros:
- No more premium payments—one less bill to worry about.
- If you don’t need financial support, you’re not wasting money on insurance.
Cons:
- No burial policy or final expenses coverage unless you have other insurance.
- If you change your mind later, getting new insurance will be more expensive.
Best for: Someone who no longer needs life insurance coverage and has sufficient financial security.
How to Choose the Best Option for You
Evaluate Your Financial Situation
Consider the following:
- Do you still have dependents who rely on your financial support?
- Are there outstanding debts like a mortgage or loans that need coverage?
- Will your spouse or family be financially stable without your life insurance policy?
If any of these are concerns, you likely need continued financial protection.
Factor in Your Health and Age
- If you’re still in good health, a new life insurance policy may be the best choice.
- If you’ve developed a health condition, renewal or conversion might be the safer bet.
Compare Costs and Benefits
Each option comes with different costs and additional benefits:
- Renewing provides temporary coverage but can be expensive.
- Converting offers lifetime coverage but has higher premiums.
- Buying a new policy allows for customization but requires a medical exam.
How BeneHub Helps Self-Employed Individuals Get Term Life Insurance
Being your own boss comes with a lot of perks—flexibility, control, the freedom to build something meaningful. But let’s be honest: when it comes to benefits like life insurance coverage, you’re on your own. That’s where we come in.
At BeneHub, we know self-employed individuals need term life insurance that balances affordability with real financial protection. We help you compare coverage options, find policies that fit your lifestyle, and even navigate plans that skip the new medical exam hassle. Whether you’re looking for basic income replacement or a policy that can grow with your business, we’ll guide you to the right fit—without the insurance jargon or sales pressure.
Your Term Life Insurance Policy Is Ending – Now What?
When your term life insurance policy expires, it doesn’t have to mean the end of financial protection. Whether you choose to extend term life insurance, convert to a permanent life insurance policy, or purchase a new life insurance policy, the right decision depends on your needs.If you need guidance, BeneHub is here to help. We assist individuals in finding the right insurance policy for their financial goals, whether it’s securing continued coverage or planning for final expenses. Reach out today, and let’s make sure your future is protected.