The Insider’s Guide to Life Insurance
Does Term Life Insurance Expire?
That’s the one-word answer as to whether or not term life insurance expires.
As for the slightly-longer-but-significantly-more-comprehensive 221-word answer…
The “term” in a term life insurance policy refers to the length (in years) that you’re covered for. A typical term life policy will run for 10, 15, 20, or 30 years. You choose the term length at the time you buy a policy and it should be one that’s comprehensive enough to cover your loved ones through all major financial life events (paying off a mortgage, sending your kids to Harvard). When that “term” is up – or if you’ve failed to pay your premiums before that period is up – your coverage ends.
Something important to keep in mind: if you want the option to extend coverage after the term length expires, make sure that your insurer offers guaranteed renewability. Guaranteed renewability ensures that you’ll be able to get covered after the initial policy term length ends. Most policies from top insurers offer this inherently in their contract (we do). The premium will just be more expensive this time around, being that you’ll be older and potentially less healthy than you were when you purchased the original policy, but the renewed term premiums will still be better than whole life insurance.
The beauty of term life insurance is that you’re able to select a plan that works specifically for you. Something with an affordable premium (that’s key) that you’ll pay for during the time when your family would likely need it most.