Do Life Insurance Policies Expire?

When discussing options for life insurance with families, one question we hear often is “do life insurance policies expire?“

The short answer is, yes, life insurance policies can expire. Depending on the kind of policy you have, it may or may not have an expiration date. Term life insurance policies expire when the term you select ends. Permanent life insurance plans (such as whole or universal) continue for your entire life as long as you make timely premium payments in full. 

To explore the concept of life insurance policy expiration, let’s discuss the different types of life insurance, and what you need to know to keep your coverage in force.

Types of Life Insurance

There are two primary categories of life insurance: term life insurance and permanent life insurance.

• Term Life Insurance: These plans have a set duration, usually between 10 and 30 years. The beneficiaries receive a death benefit if the policyholder passes away during the term. The policy terminates at the end of the term, though, and no benefits are paid even if the policyholder is still alive.
• Permanent Life Insurance: Whole life, universal life, and variable life policies are examples of permanent plans that are intended to offer coverage for the duration of the policyholder’s life. As long as the premiums are paid, these plans are life-long, and they usually build up cash value over time.

What Happens When Term Life Insurance Ends?

When a term life insurance policy ends, the coverage provided by the policy also ceases. If the insured individual passes away after the policy has expired, no death benefit will be paid to the beneficiaries. However, if you still need life insurance coverage after your term policy expires, you have several options:

1. Renew your policy: Some term policies include a guaranteed renewability clause that permits you to continue having your insurance coverage as long as you keep paying the premiums after the initial term ends. Keep in mind that depending on your age, your premiums will probably increase every year, possibly significantly, you won’t usually be required to undergo another physical.

2. Convert your policy: Some term life insurance plans offer the option of converting to permanent coverage. This option is usually more expensive than renewing your policy but may be worth considering if you want lifelong coverage. Be sure to familiarize yourself with the conditions of converting your policy so you don’t miss the date of conversion. 

3. Buy a new policy: If you’re in reasonably good health, you may be able to find an affordable policy. Some insurance companies write policies for applicants up to age 85. We do have policies for individuals with significant medical challenges as well. 

How Long Does Whole Life Insurance Last?

Whole life or permanent life insurance policies typically do not have an expiration date as long as premiums are paid on time. Here are some important points to consider:

• Premium Payments: To keep your permanent life insurance policy in force, you must make timely premium payments. Missing premium payments can lead to policy lapses and cancellation.
• Cash Value: Most permanent life insurance policies build up cash value over time that you can use to take loans or pay premiums. If your policy’s cash value has grown sufficiently, it may be able to assist with premium payments and avoid policy lapse. Be aware that taking cash out of your policy may lead to policy expiration.
• Paid-Up Policies: Some whole life insurance policies allow you to stop paying premiums after a specific number of years while keeping the policy in force. These policies become “paid-up” and still provide a death benefit.

Keeping Your Policy Active

You should take the following actions to prevent your life insurance policy from prematurely expiring:

• Pay your premiums on time, and consider automating your payments so they are never late.
• Regularly review your policy to become familiar with its terms and conditions.
• Communicate with your agent to address any concerns or changes in your circumstances.
• Be aware of any premium flexibility options, such as lowering coverage or utilizing cash value.

 Understanding your specific policy’s details and staying in contact with your insurer is crucial to ensure that your life insurance coverage remains in force, providing the financial security your loved ones deserve. Communicating with your life insurance specialist is key to making sure your coverage will be there for your family when they need it most.