What are my options once my term life insurance expires?

term life insurance

A term life insurance policy is one of the most important tools you can have to protect the financial future of those you love. Life insurance is a valuable investment, especially when starting a new family. Should the unexpected happen, interrupting your revenue stream, a term life insurance policy would help ensure financial stability for your family. It could allow them to remain in the family home, pursue higher education, assist with childcare and everyday expenses.

Unlike its Permanent Insurance counterpart, term life insurance has an expiration date. One usually chooses a date far into the future, often covering dependent family members until they are self-sufficient or the home mortgage has been paid off. During these 10, 20, or 30 years, it is easy to forget about your coverage, content with the peace of mind it offers.

term life insurance

Now that you are older and inching closer to the end of the term of your life insurance policy, you’ll want to explore your options. Here are a few things to keep in mind as you decide whether to renew your term life insurance policy or what to do if it has already expired.

Re-examine Your Needs – When you have a young family, it is generally advised to choose coverage to meet their needs over the coming years. Perhaps you no longer require a policy to cover their education or you’ve already paid off the mortgage on your family home. This is an excellent time to assess your financial needs over the next few decades and address how your family’s circumstances might change in the future.

Are you approaching retirement? Will your retirement income be enough for the surviving spouse? Will they require home care assistance? Do you want to leave a significant financial gift to those left behind when you pass away?

Even if you and your partner are in an excellent financial situation, you may want to consider the needs of other family members. Your kids might have graduated from college, however are you helping them buy their first home?  The payout from your life insurance policy can go a long way to help protect them from financial hardship and leave a gift for the grandchildren.

Renew Your Policy’s Term – Every life insurance provider has their own rules and regulations. Some may offer you a window of opportunity where you can renew your policy in advance. If you can, you may want to take advantage of this time so that you can potentially avoid your policy auto-renewing at a much higher rate. The older you are, the more your premiums will cost, so consider taking advantage of any chance to renew at the discounted rate that your provider offers.

Switch Your Term Life Insurance Policy to a Permanent Life Insurance Policy –  Depending on the life insurance provider, some term life insurance policies can be converted to permanent policies. Permanent life insurance is designed to provide you with protection throughout the rest of your life, with a fixed premium. When you convert your policy from term to permanent coverage, you generally don’t need to re-apply or re-qualify. In many cases, you will not need to undergo a medical examination or underwriting – depending on the life insurance provider. A permanent life insurance policy does have higher rates than term life insurance policies, but you will be insured even if you live to the ripe age of 100!

Consider a New Policy – When your term life insurance policy expiry date is approaching, this might be the perfect time to shop around. In the time since you purchased your previous policy, new insurance providers with new offerings may have become available, with terms and rates that are a better fit for your current needs. An insurance broker may be a great resource at this stage, helping you compare different policies offered by other life insurance providers.  

No-Medical Life Insurance – After your term life insurance policy expires, if you are in less than perfect health, a no-medical life insurance policy might be the right solution for you. These policies offer a quick, straightforward application with medical questions, but no medical tests are required.

When your term life insurance policy is expiring, it is essential to explore your options and carefully evaluate them. Perhaps you decide that you no longer require coverage because you have enough savings and no dependants, or maybe you’re considering additional coverage to protect your growing family.

Whatever your current situation, you have options! There is a vast array of insurance products to meet your needs at every stage of life, budget, and goal. Take this opportunity to re-assess your life insurance needs and ensure that the protection you choose feels like a great fit.

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