It's easy to select a life insurance policy and rarely think about it again. Don't do that. You should review coverage needs periodically — every year or few years — particularly when a major life event occurs, such as marriage, birth of a child, home purchase, or if any new debt is acquired.
What happens when your term policy ends?
If you die while your policy is still in effect, then the insurer pays the full death benefit to the person(s) you designated as your beneficiary. The amount paid to beneficiaries is typically not subject to income tax.
There are a few other situations that can lead to the end of your term policy:
Reaching the policy's end date: If you've purchased the correct coverage amount or made the right adjustments over the years, you may no longer need life insurance by the time your policy ends. If you feel as if you need additional life insurance coverage, explore renewing the policy with your current provider.
Cancellation due to nonpayment of premiums: If you stop paying the premium at any time during the policy term, your policy will lapse. Most policies have a grace period (typically 30 days) for paying your premium.
Feel like a term life insurance expert? You should. Now, find out how affordable life insurance can be: