Term life insurance can offer an affordable way to provide your family with financial protection in the event of your untimely passing. However, these policies eventually expire, which can leave your loved ones vulnerable. Fortunately, there are many ways to maintain or replace that coverage. Read on to learn how term life insurance works, what happens when it expires, and what options you have to continue coverage when your policy ends.
A term life insurance plan offers policyholders coverage for a set period, called the term length. Many insurers offer term lengths of 10 to 30 years. If you pass away while your plan is active, your loved ones will receive the death benefit. Premiums are quite affordable since these policies are simple, lack cash value, and do not last for your lifetime.1 As a result, a term life insurance policy from Aflac can provide you and your loved ones with substantial financial protection at a rate that fits your budget.
Don’t wait until it’s too late. Help cover yourself and your family with affordable coverage from Aflac.
When your term life insurance plan expires, the policy’s coverage ends, and you stop paying premiums. Therefore, if you pass away after the policy ends, your beneficiaries will not be eligible to receive a death benefit.2
Some policyholders may only need term life insurance for a certain timeframe, such as to help protect a child until they reach adulthood and start their career. In this case, letting the policy expire without getting new coverage may be feasible. However, some may find that they’ll still need life insurance coverage, so they’ll have to get a new policy.
Once your policy ends, you can’t get back the premiums you paid unless you have a return of premium rider.2 This optional add-on lets you receive a refund of premiums if you outlive your policy term. However, a return of premium rider can increase your premiums, so you must budget accordingly when adding one.
Here are some options you have to remain covered after your term life insurance policy ends:3
Term life insurance often lets you convert your policy to a permanent life plan for higher premiums. This policy type lasts for your entire life if you remain current on your premiums. It also comes with a cash value growth component that can serve as a wealth-building vehicle.
Every time you pay premiums, the insurer puts part of your payment into the cash value. It then grows tax-deferred at a certain rate, depending on the policy type. For example, Aflac’s whole life insurance policies grow your cash value at a fixed, guaranteed rate.
As you accumulate cash value, you can borrow against it or withdraw from it. Plus, if you no longer need coverage and surrender your policy, your insurer pays you the cash value minus surrender charges. Keep in mind that using your cash value in these ways may incur tax consequences.
The lifelong coverage and cash value make permanent life insurance premiums more expensive than term life insurance.1 However, these benefits can be worth the higher cost for those who want more peace of mind and wealth-building opportunities.
Many insurers attach renewal riders to term life insurance. This lets you extend your coverage without new underwriting or medical exams. Remember that premiums will be higher since you’ll be older when renewing your policy. Furthermore, you may have to stick with the same term length the original policy had.
If your term life insurance expires and it’s too late to renew or extend coverage, such as if you didn’t need coverage for a few years, you can buy a new term life insurance policy. This may allow you more flexibility in choosing the policy term, but you’ll likely have to take a new medical exam to get coverage. Additionally, you’ll pay more in premiums since you’ll be older when applying, but your premiums may be less than if you renewed the policy.
If your term life insurance has already expired and it’s too late to convert it, such as if you didn’t need coverage for a few years, you can still purchase a permanent life insurance policy. However, traditional policies may require a medical exam. Fortunately, some policies are available with no medical exam, such as final expense insurance from Aflac.
If your term life insurance plan is expiring soon, evaluate your options so that you can continue coverage seamlessly. Whether you renew your coverage, convert to a permanent life insurance policy, or take out a new policy, understanding the pros and cons of your options is vital to making the best decision.
Explore your life insurance options.
1 Forbes – Average Cost of Life Insurance in May 2023. Updated May 17, 2023. https://www.forbes.com/advisor/life-insurance/how-much-is-life-insurance/. Accessed May 18, 2023.
2 Policygenius – What Happens If You Outlive Your Term Life Insurance? Updated February 23, 2023. https://www.policygenius.com/life-insurance/outlive-life-insurance/. Accessed May 18, 2023.
3 Investopedia – What Happens If You Outlive Your Term Life Insurance Policy? Updated May 28, 2022. https://www.investopedia.com/what-happens-if-you-outlive-your-term-life-insurance-policy-5076607. Accessed May 18, 2023.
Content within this article is provided for general informational purposes and is not provided as tax, legal, health, or financial advice for any person or for any specific situation. Employers, employees, and other individuals should contact their own advisers about their situations. For complete details, including availability and costs of Aflac insurance, please contact your local Aflac agent.
Life (A68000 Series) - In Arkansas, Idaho, Oklahoma, Oregon, Pennsylvania, Texas, & Virginia, Policies: ICC1368100, ICC1368200, ICC1368300, ICC1368400. In Delaware, Policies A68100-A68400. In New York, NY68100-NY68400. Term and Whole Life (B60000 Series) - In Arkansas, Idaho, Oklahoma, Pennsylvania, Texas, & Virginia, Policies: ICC18B60C10, ICC18B60100, ICC18B60200, ICC18B60300, & ICC18B60400. Group Whole Life (Q60000 Series) - In Arkansas, Delaware & Oregon, Policy Q60100M. In Idaho Policy Q60100MID. In Oklahoma, Policy Q60100MOK. In Texas, Policy Q60100MTX. Group Term Life (Q60000 Series) - In Delaware, Policies Q60200M. In Arkansas, Idaho, Oklahoma, Oregon & Texas, Policies ICC18Q60200M, ICC18Q60300C, ICC18Q60400C.
Aflac coverage is underwritten by American Family Life Assurance Company of Columbus. In New York, coverage is underwritten by American Family Life Assurance Company of New York.
Tier One Coverage
Life (Final Expense Life) - In Arkansas, Delaware, Idaho, Oklahoma, Oregon, Pennsylvania, Texas, & Virginia, Policies ICC21-AFLLBL21 and ICC21-AFLRPL21; and Riders ICC21-AFLABR22, ICC21-AFLADB22, and ICC21-AFLCDR22.
Coverage may not be available in all states, including but not limited to DE, ID, NJ, NM, NY or VA. Benefits/premium rates may vary based on state and plan levels. Optional riders may be available at an additional cost. Policies and riders may also contain a waiting period. Refer to the exact policy and rider forms for benefit details, definitions, limitations and exclusions.
Aflac’s family of insurers include Aflac, Aflac New York, Continental American Insurance Company, and Tier One Insurance Company.
Aflac WWHQ | Tier One Insurance Company | 1932 Wynnton Road | Columbus, GA 31999.
Aflac New York | 22 Corporate Woods Boulevard, Suite 2 | Albany, NY 12211