What happens if you outlive your life insurance?


When you outlive your term policy, you will no longer have life insurance coverage—but you can convert to a permanent policy or buy new term insurance.

Nupur GambhirAmanda Shih author photo


Nupur Gambhir

Nupur Gambhir

Life Insurance Expert

Nupur Gambhir is an insurance editor at Policygenius and licensed Life, Health, and Disability agent in New York.


Amanda Shih

Amanda Shih

Editor & Licensed Insurance Expert

Amanda Shih is an insurance editor and licensed Life, Health, and Disability agent at Policygenius in New York City. Her work has appeared in Slate, Lifehacker, Jetty, and J.D. Power.

Updated February 26, 2021|6 min read

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When you buy a term life insurance policy, you purchase it for a set term, usually 10-30 years. You pay premiums throughout the term and if you die during that time, your family gets a death benefit.

If you live past your policy’s expiration date, ideally you’ll no longer need life insurance by then. If you still need coverage after your policy expires, consider a term conversion or buy a new policy at a lower coverage amount.

Key Takeaways

  • Without a replacement policy, your family won’t receive a death benefit after your policy expires

  • You can use a term conversion for permanent insurance or buy a new term policy to replace coverage

  • You may not need new coverage if you have enough savings and no dependents

  • Shop for new coverage at least six months before your policy expires to avoid a coverage gap

Do you still need life insurance after your term policy expires?

Whether you need life insurance after your policy expires depends on your ability to support your dependents when you die. As your current policy’s expiration date approaches, recalculate your coverage needs. If you:

  • Still have loved ones who rely on your financial support

  • Have insufficient savings to cover end-of-life expenses

  • Are still paying off large debts, like a mortgage

You may still need life insurance coverage to protect your family, though you likely need a smaller death benefit this time.

If you’re coming to the end of your term and think you may need continued coverage, start that conversation with your insurer or broker six months before your policy expires to ensure that you aren’t left with a coverage gap that could put your family at risk.

What to do if you outlive your term policy and no longer need coverage

If your loved ones no longer need your financial assistance, you’ve paid off your debts, and your savings can support your retirement and final expenses, then you probably don’t need life insurance anymore. 

In this case, you can just let your policy expire. When the plan ends, so will your coverage. If you die the day after your policy expires, your family won’t get a death benefit of any size. 

Can you cash out a term life insurance policy?

Unlike some whole life insurance policies, there is no cash value component to cash out in term life insurance. Unless you bought return of premium term life insurance, which is not recommended due to high costs, you don’t get any refund for outliving your policy. 

No one likes to pay for something they’ll never use, but think of it like your car insurance: you pay the premiums but hope to never use the service. 

A term insurance policy provides necessary financial protection—it’s not an investment. The lack of a cash value is also part of what makes it significantly more affordable than whole life insurance

What to do if you outlive your term policy and still need coverage

If you still have dependents or financial responsibilities after your policy’s end date, you’ll need some life insurance coverage. Because your financial needs are different now, this is an opportunity to switch to a more suitable policy or coverage amount.

While you technically can’t extend your current term life insurance policy, you can convert your term policy into a permanent insurance policy or buy a new term policy

How to convert term life insurance into permanent life insurance

Most term life insurance policies come with a built-in term conversion rider, which gives you the ability to convert your policy to a permanent policy when the term expires. Ask your provider if you’re unsure if your policy includes a term conversion rider.

The main advantage of a term conversion is that you won’t have to go through the underwriting process again, which allows you to skip the medical exam and keep your original insurance classification even if your health has worsened.

You’ll also avoid the higher term life premiums for older applicants. A $500,000, 20-year policy costs under $30 per month for a healthy 35-year-old male. A healthy 55-year-old male will pay $150 per month for the same coverage.

However, permanent insurance is five to 15 times more expensive than term coverage. Though your provider may offer a term conversion credit to lower your payments for the first year, you’ll only see reduced costs in the short-term.

If you decide to take advantage of the term conversion rider, you’ll need to make this change while your policy is active. Make sure to begin the process in the final year of your term to avoid missing out.

→ Learn more about the differences between term and permanent life insurance

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Purchasing a new term life insurance policy

If you’re still in good health, applying for and buying a new term policy could be more affordable than a term conversion.

Start the application process for a new term policy as soon as possible to avoid a coverage gap. Even though you have bought life insurance coverage before, changes in your health or other records could mean you’re ineligible to buy a new policy now. The earlier you start, the better prepared you will be for any hiccups in the application process.  

When purchasing a new term policy look for a smaller death benefit and a shorter term length, and compare quotes to find the most competitive premiums for your needs. 

You can choose from several types of term insurance:

Level term life insurance

Your standard term life insurance policy. You pay the same premiums for the entirety of the policy. This is likely the best policy option—offering the most coverage for the lowest price.

Instant decision life insurance

Instant decision life insurance policies offer traditional coverage at a competitive price. Instead of a medical exam, the insurer conducts a phone interview and comes to an application decision within 24 hours.

Annual renewable term life insurance

A type of term life insurance that allows you to re-evaluate how much you spend on premiums every year. During the first few years of this policy, you’ll typically pay less than you would with other term policies, but the rates increase each year and end up costing you more in the long run.

Decreasing term life insurance

Rarely offered by insurance companies, decreasing term life insurance is usually a cheaper option for term life insurance. With this policy, you pay the same amount for premiums each year, but the benefit amount decreases each year.

Return of premium term life insurance

The one type of term life insurance that refunds your premiums at the end of the policy term, though at the cost of higher premiums. The return is often less than what you can accumulate by simply investing the difference between a return of premium policy and a level term policy.

No medical exam term life insurance

The best policy type for people adhering to stay-at-home mandates as it doesn’t require a medical exam. No medical exam life insurance underwriters usually still conduct an in-depth evaluation of your health through previous records.

Group term life insurance

Employer-sponsored life insurance that is often subsidized in cost. It’s easy to get but often doesn’t provide enough of a death benefit and if you leave your job, you lose your coverage.

Mortgage protection term life insurance

The best policy for people who are most concerned with paying off a mortgage in the event of their death. There aren’t any other benefits when purchasing this type of term life insurance policy.

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If you outlive your life insurance policy and you don’t need any more coverage, you can simply let your policy expire. But if you still need financial protection for your loved ones, you should convert your term life insurance policy into a whole life insurance policy or get a new policy altogether. Not doing so risks the financial health of your family. 

Outliving your term life insurance FAQ:

What happens when your term life insurance expires?

Before your coverage ends you can buy a new policy, convert your term policy to whole life insurance, or go without life insurance going forward, depending on your needs.

Can you extend term life insurance coverage?

You can’t extend the term of an existing life insurance policy, but you can buy a new policy if you need a longer term length.

Do I get a refund of my premiums if I outlive my term life policy?

Your premiums are not refunded after your policy expires unless you bought return of premium life insurance, which is costly and not recommended.

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