What Happens At The End Of Term Life Insurance?

  1. 16470 POINTS
    David Osgood
    Agent, Rural Mutual Insurance Co., Union Grove, WI
    Typically the policy will end, hence the name term insurance. Some company's may before the end of the term policy offer you to convert the policy to a whole life policy or they may offer an extension of the term at a more current premium rate. Either of these scenarios may require an update of medical information and/or another physical/blood draw. Every company and policy is different so please contact your local agent to find out what is available at the end of your term life insurance policy.
    Answered on May 14, 2013
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  2. 123 POINTS
    Everett Young
    Everett Young, CLU, Delaware Valley, Pennsylvania
    At the end of the initial rate guarantee period, most term life policies do not actually end. There is a large rate increase , however, and most people cancel their policies by not paying the renewal premium. Most term life policies can still be "converted" to universal life or whole life, allowing the insurance to continue. Rates are higher, but these conversion policies are usually a better alternative than paying ever-increasing term life rates.
    Answered on September 12, 2014
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  3. 10968 POINTS
    Tim Wilhoit
    Owner, Your Friend 4 Life, Brentwood TN
    Depending on the type of term life insurance policy you purchased, really one of two things will happen at the end of the guaranteed term. The first and most common is you will see a dramatic rate increase, some times as much as 1,000%. This is to insure you cancelling the policy and applying for another plan so underwriters get another chance to underwrite you. The second type of policy action is you receive a letter in the mail that states on this date your policy will cancel and coverage ends.
    Answered on September 12, 2014
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  4. 37376 POINTS
    David G. Pipes, CLU®, RICP®
    Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
    Not all term policies are created equal. Some term policies end and do not provide any extended benefits. Some will allow you to purchase a whole life policy without having to prove your insurability, which can become a major issue as you get older. Others will allow the policy to extend to another age or date and the premium will adjust each year.
    Answered on September 12, 2014
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  5. 21750 POINTS
    Jim Winkler
    CEO/Owner, Winkler Financial Group, Houston, Texas
    That is a great question! Unlike a whole life policy, which ends when you do, term policies almost always end before you do. It's why they are so cheaply offered, statistically, the companies rarely have to pay out, compared to whole life policies. So when they do end, you have really only three choices: walk away as if there never was a policy, (since there is nothing contractually obligating either of you anymore, in the typical policy case), hope that the policy has a conversion clause ( one that allows your paid premiums to be converted to a paid up whole life policy with a greatly reduced face value), or you renew the policy. If you choose the latter, be prepared for the policy to renew in one year terms, and for the price to go up exponentially each time. They get very expensive very quickly. This can be a real problem if it happens when age or health issues prevent you from finding another company that will write you. This is often the case with the term policies that companies like AARP and AAA offer, policies that end when you turn 80. With life expectancy now averaging years longer than 80, and the increasing costs as you age, more and more Elder citizens find themselves out a lot of money, and with no protection. Please be careful when you are looking at these kinds of policies, okay? Thanks for asking!
    Answered on September 28, 2014
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  6. 624 POINTS
    BILL HANNA
    Agent, WMH Consulting LLC, Fort Worth, Texas
    Depending on the type of term policy purchased 3 common outcomes are: (1) coverage ends with no options for coverage. (2) Option offered to convert to a whole life policy without any proof of insurability required. (3) Option for a policy to extend to another age or date with a premium adjustment each year...
    Answered on June 12, 2015
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