Term life insurance covers you for a set number of years — typically 10, 20, or 30 years — and ends when that period is over
The term is the length of time your policy stays in force. You pick the term length when you buy the policy, and your premiums stay the same for the entire term. Once the term ends, the coverage stops unless you renew or convert it. This is different from permanent life insurance, which lasts your whole life as long as you keep paying premiums.
The most common term lengths are 10, 20, and 30 years. Some insurers offer 15-year or 40-year terms, but these are less common. Your choice depends on how long you need the death benefit — usually until your kids finish school, your mortgage is paid off, or you reach retirement age.
Key Takeaways
- Term life insurance lasts for a fixed period you choose at purchase, most commonly 10, 20, or 30 years.
- Your premium stays the same throughout the entire term, even if your health changes.
- When the term ends, coverage stops completely unless you renew the policy or convert it to permanent insurance.
- Renewing after the term ends usually means paying much higher premiums based on your current age and health.
- Some policies include a conversion option that lets you switch to permanent coverage without a new medical exam.
What happens when your term ends
When your term expires, you have three choices: let the policy end, renew it, or convert it to permanent insurance. Most people let it end because they no longer need the coverage — their kids are grown, the mortgage is paid, or they have built enough savings.
If you do want to keep coverage, renewal is usually automatic or available without a new medical exam, but the premiums jump significantly. A 30-year-old who paid $30 per month for a 20-year term might pay $80 to $120 per month to renew for another 10 years at age 50, depending on the insurer and the death benefit amount. The exact increase varies by company and your health status at renewal.
Conversion is different: it lets you turn your term policy into a permanent policy (usually whole life or universal life) without proving you are still healthy. You do not need a medical exam. The premium for permanent insurance is higher than term, but conversion locks in your insurability at your current age, which matters if your health has declined since you bought the original policy.
Why term length matters for your situation
Choosing the right term length means matching it to when you actually need the money. If you have a 15-year mortgage and two kids who will be through college in 18 years, a 20-year term covers both events. If you are 35 with young children and plan to work until 65, a 30-year term takes you to retirement age.
A shorter term (10 years) costs less per month but leaves you uninsured sooner. A longer term (30 years) costs more upfront but gives you peace of mind that your family is covered through the years when they depend on your income most. Some people buy multiple policies with different term lengths to stagger their coverage, though this is less common.
The term you choose also affects how much you can afford to buy. If a 30-year term is too expensive, a 20-year term at a higher death benefit might fit your budget better and still cover your main obligations.
Renewal and conversion options explained
Most term policies include a may provide renewal option, which means the insurer must let you renew when the term ends, even if your health has gotten worse. You do not have to pass a medical exam. However, the new premium is based on your age at renewal, not your original age, so it will be significantly higher.
A conversion option lets you switch to permanent insurance without undergoing medical underwriting. This is valuable if you develop a health condition during your term — you can convert to whole life or universal life and lock in your insurability. The conversion premium is based on your current age and the permanent insurance rates at that time, not on your health status. You typically have a window of time (often until age 70 or 75, or within a certain number of years after the term ends) to convert.
Not all policies include both options, so check your policy documents or ask your agent what is included. Some insurers charge a small fee to convert, while others do not. Conversion is most useful if you think you might want lifelong coverage or if you are concerned about your health changing.
Comparing term lengths and costs
The longer the term, the higher your monthly premium, but the cost per year of coverage is often lower. A 30-year term spreads the risk over more years, so the insurer charges more per month but less per year of protection. A 10-year term has lower monthly payments but higher annual cost.
The difference in monthly premium between a 20-year and 30-year term for the same death benefit is usually $10 to $30 per month, depending on your age and health. For a $500,000 death benefit, a 35-year-old in good health might pay $25 per month for a 20-year term and $35 per month for a 30-year term. These are examples only; actual rates vary by insurer.
Your age when you buy also matters. Buying at 30 instead of 40 locks in a much lower rate for the entire term. If you think you might need coverage later, buying term insurance sooner is usually cheaper than waiting and renewing at an older age.
What to do before your term ends
Start thinking about your coverage needs 6 to 12 months before your term expires. Review whether you still need life insurance and how much. If your kids are grown and your mortgage is paid off, you might not need any coverage at all. If you still have dependents or debt, you might want to renew or convert.
If you think you might want to convert to permanent insurance, do it before the term ends. Once the term expires, you may lose the conversion option or face stricter terms. Check your policy documents for the conversion deadline and any conditions.
If you are healthy and want to keep coverage, you might also consider buying a new term policy instead of renewing the old one. A new policy at your current age might have a lower rate than renewing the old policy, especially if rates have dropped or your health is still good. Compare quotes from a few insurers before deciding.
Frequently Asked Questions
Can I extend my term if it is about to expire?
Yes, most policies allow renewal, but you cannot simply extend the original term. You renew by starting a new term, usually for 10, 15, or 20 years, at your current age. The premium will be much higher than your original policy. Some policies also allow conversion to permanent insurance, which is a different option than renewal.
What if I cannot afford the renewal premium?
You can let the policy end and buy a new term policy if you are still insurable. A new policy at your current age might cost less than renewing the old one, depending on rates and your health. If your health has declined, renewal might be cheaper than a new policy because you do not need a medical exam. Compare both options before deciding.
Do I lose coverage the day my term ends?
Yes, coverage stops at the end of your term unless you renew or convert before that date. There is usually a grace period of 30 to 60 days after the term ends to renew, but you are not covered during that time. Do not wait until the last day to decide; contact your insurer at least a month before expiration.
Can I convert to permanent insurance after my term ends?
It depends on your policy. Most policies allow conversion only during the term or within a short window after it ends. Check your policy documents for the conversion deadline. If you miss the deadline, you would need to buy a new permanent policy and pass a medical exam.
Is it better to buy a longer term or renew a shorter one?
Buying a longer term upfront is usually cheaper per month and locks in your rate for more years. Renewing a shorter term gives you flexibility but means higher premiums at renewal. If you know you will need coverage for 30 years, buying a 30-year term at age 35 is typically cheaper than buying a 10-year term and renewing twice.