What Happens If You Outlive Your Whole Life Insurance?

When your whole life insurance policy expires, you may not need life insurance if you no longer have financial dependents, have saved enough money to self-insure, or have paid off your debts with sufficient savings to cover end-of-life expenses. However, you may still need life insurance if you have loved ones who rely on your financial support, insufficient savings to cover end-of-life expenses, or are still paying off large debts like a mortgage. As your current policy’s expiration date approaches, recalculate your coverage needs. Here is a table of the different types of term life insurance policies:

Type Description
Level Term Life Insurance You pay the same premiums for the entirety of the policy offering the most coverage for the lowest price.
Instant Decision Life Insurance It offers traditional coverage at a competitive price. Instead of a medical exam, the insurer conducts a phone interview and comes to an application decision within days. It will be hard to qualify if you have health concerns.
Annual Renewable Term Life Insurance The term life insurance lasts only one year. During the first few years of this policy, you’ll typically pay less than you would for other term policies. But the rates increase each year and end up costing you more in the long run.
Decreasing Term Life Insurance It 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 This type of term life insurance refunds your premiums at the end of the policy term. Rates are much higher than regular term policies, and 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 Like instant decision life insurance, this application doesn’t require a medical exam. No-medical-exam policies are based on an evaluation of your health through existing records. You could get an offer in about a week, or even less.
Group Term Life Insurance Employer-sponsored life insurance that is often subsidized in cost. It’s easy to get but rarely provides enough of a death benefit and if you leave your job, you lose your coverage.
Mortgage Protection Term Life Insurance A policy that pays off the remainder of your mortgage directly to your lender if you die. Your loved ones don’t get any money.

If you still need coverage, start looking for a replacement at least six months before your policy expires. You can’t extend your current term life insurance policy, but you can convert your term policy into a permanent insurance policy or buy a new term policy. Many 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 before the term expires. The main advantage of a term conversion is that you won’t have to go through underwriting again. You’ll skip the medical exam and keep your original health classification even if your health has worsened, saving you some money on premiums. However, permanent insurance is five to 15 times more expensive than term coverage. If you decide to take advantage of the term conversion rider, you’ll need to make this change while your policy is active. Begin the process in the final year of your term at the latest. When purchasing a new term policy, choose a coverage amount and term length that fits your current needs. Compare quotes to find the most affordable premiums for your needs.

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