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What Is The Expiry Date On Term Life Insurance?

Canadian LIC
Canadian LIC

By Harpreet Puri

CEO & Founder

  • 11 min read
  • January 22th, 2025

SUMMARY

This blog explains what happens when a Term Life Insurance Policy reaches its end, including options such as renewal, conversion to Permanent Insurance, or purchasing another new policy. It talks about how much Term Life Insurance Costs, the factors that affect premiums, and consulting a Term Life Insurance Agent. Furthermore, the blog elaborates on how to get Term Life Insurance quotes and answers frequently asked questions about Term Life Insurance in Canada.

Introduction: The Mystery Behind the Expiry of Term Life Insurance

Term Life Insurance Policies can be a topic of interest, with questions about whether these policies expire or not. This is a very common question Canadians ask: What’s the expiry date on Term Life Insurance? This is a very important question indeed, but in fact, getting clear on when and how Term Life Insurance comes to an end can be tricky, especially for first-time customers of life insurance.

Term Life Insurance Policies can be a topic of interest, with questions about whether these policies expire or not. This is a very common question Canadians ask: What’s the expiry date on Term Life Insurance? This is a very important question indeed, but in fact, getting clear on when and how Term Life Insurance comes to an end can be tricky, especially for first-time customers of life insurance.

For people who want to keep their families financially protected, pay off debts, or ensure loved ones are in good financial standing in case of an unexpected death, Term Life Insurance is one of the most preferred, affordable options in Canada. Permanent Life Insurance covers you until your death, while Term Life Insurance in Canada covers only for a specific period, such as 10, 20, or 30 years.

The low-Term Life Insurance Cost is, however, a pretty attraction, but people often overlook that the term policy one takes has got an end, too. So what is that period, and where do you go from there after the end of that particular term? Does the coverage disappear on you, or is there the provision of it being elongated? Commonly asked questions arise often when facing the end date of a certain policy term, with many individuals panicking about ending up without anything after their own term expires.

For the protection of families, the coverage of debts, or ensuring that loved ones are financially fit in the case of a sudden death, Term Life Insurance is very popular among people in Canada and comes at an affordable cost. Unlike Permanent Life Insurance, which covers you for life, Term Life Insurance is only for a set period, 10, 20, or 30 years.

By the end of this article, you’ll have a clear understanding of your Term Life Insurance coverage, what happens when it expires, and how to make the best decisions moving forward.

How Long Does a Term Life Insurance Policy Last?

Canadian LIC

Term Life Insurance is the term itself insurance coverage for a set term or amount of time. The term might be 10 years, 20 years, or 30 years, long enough to satisfy the needs you have at that point in life. It normally sets the period of time for which you have purchased the coverage and is in place when heavy financial responsibilities fall onto your shoulders, such as having kids or paying on a mortgage.

For instance, you may take a 30-year Term Life Insurance. Here, the duration of the term is 30 years from the date that you bought the policy. In case you die within the term, say, 30 years, then your death benefit shall be paid to your beneficiaries. If, however, you outlive up to 60 or 70, your policy will terminate and cease coverage for you. In that event, your policy benefits will be paid out to no one after the date your policy expires.

Term Life Insurance has a set expiration date. The date is not changed unless the policyholder decides to change it. For instance, you may be permitted to exchange your Term Life Insurance for Permanent Life Insurance at the end of the term, but that’s something to plan for within the term period.

What Happens When Your Term Life Insurance Expires?

Having just learned that the term life policy covers you for a specific term, what then happens when this term is reached? This seems to be a typical point of confusion in people’s thinking. Once the term life policy expires, several things should now come to mind:

  • No Cash Value: Your coverage is in place for the term, after which the policy ends, and you are no longer covered by the insurance. If you die after the expiry of the term, your nominees or beneficiaries will not receive any payment from the policy.
  • No Cash Value: Term life policies do not create a cash value like whole life does. As such, the insurance company pays nothing of all the money that you might have been paying for a long time after the term ends.
  • Renewal or Conversion Options: Many Term Life Insurance Policies also allow renewal and conversion options. For instance, you can renew the policy when the term has come to a close without doing a medical examination; however, your premium shoots through the roof due to increased age. Another option is to convert the policy to Permanent Life Insurance Coverage before the end of the term. You might like having lifetime coverage, but normally, premiums will be much more expensive than your original term policy.

How Do You Know When Your Term Life Insurance Will Expire?

Knowing the date upon which your Term Life Insurance will expire will be useful in assisting you in tying up your entire financial planning activity to that date, something that might make you wiser when it counts most. Such dates are usually boldly written down and noted on any Term Life Insurance Policy that these companies issue. Generally, the expiry date is usually located at the top of the cover page, or it may appear on a page that tells the term or duration of the insurance policy.

If you are not sure when your policy will expire or if you are unsure about the renewal or conversion options, then contact your Term Life Insurance Agent. He will give you the precise details about the expiration date of your policy and your options.

Can You Extend Your Term Life Insurance After It Expires?

When the term life policy is reaching the end of its duration, and you continue to need life insurance coverage, you might want to know whether you can extend it. Well, you can’t just directly prolong the Term Life Insurance, but a couple of alternatives might be considered.

  • Renewal Option: You are likely to request a renewal of your Term Life Insurance at almost the end of the policy period. This is because you would have needed life cover until the time. Term Life Insurance cannot be directly renewed. You might consider one or two of the options outlined below.
  • Conversion to Permanent Life Insurance: You’ll most probably want a renewal of your Term Life Insurance right on time for nearly reaching the policy’s expiration. You should need life insurance coverage by now. Renewing Term Life Insurance cannot be directly renewed. Of course, one or more of the alternatives to what you read next will do just the trick for you.
  • Buying a New Term Life Insurance Policy: You are apt to request an extension of your term life cover when the covering period is going to lapse and when you especially require the insurance cover. As you cannot get term life immediately extended, perhaps you will look at one of the following possibilities.

What Are the Costs After Expiration of Term Life Insurance?

As explained above, the coverage is terminated after the Term Life Insurance Policy expires. However, if the policy is renewed or converted, then the cost of Term Life Insurance will change again.

Renewal Premiums: If you renew the Term Life Insurance Policy upon its expiration, the renewal premium paid will be relatively more expensive. It is for this reason: Your risk to the insurer increases with your age. Assume that you started a 20-year term when you were 30 years old. Your renewal premiums were quite low. At 50, you may find the renewal premiums pretty steep.

Conversion Premiums: If you renew a term life policy when it has expired, the renewal premium paid will be relatively more costlier. It’s for this: Your risk towards the insurer increases with increasing age. Presume that when you were 30, you started an insurance term 20 years at a time. Your renewal premiums were low. In your 50th year, you may find it pretty steep.

New Policy Premiums: This will be a function of the age and health you now enjoy and the duration of the term for the premium of your new policy, which you will purchase once the Term Life Insurance is over. This may be more than what you initially paid for your first policy if you then developed health issues.

Should You Let Your Term Life Insurance Expire?

Therefore, letting your Term Life Insurance run to lapse, thereby leaving it, is not a sound decision. Actually, you may have to examine your needs for quite some time before the lapsing date just to ensure the perfect coverage for both you and your family.

Assume you have dependents or are still paying off your mortgage or some other financial liability. You might just opt to continue, convert it into Permanent Coverage, or even purchase another policy to cover your needs in case the policy lapses. It’s probably best for you to let the policy lapse if changes in your finances make life insurance unnecessary.

Understanding Your Insurance Needs as You Approach the Expiry Date

When the period of your Term Life Insurance is near its end, it is time to review your needs. Life changes like marriage, children, and new financial obligations may alter your requirements for coverage. Let’s see how to evaluate your needs and what is available when your Term Life Insurance is approaching the end of its term.

  • Evaluate Your Financial Situation: You could renew the Term Life Insurance upon its expiration for a relatively much costlier renewal premium. It is only because You are older with each passing day. Your chances of dying increase more than those that the insurer prefers. Suppose that you purchased the 20-year term when you were 30 years old. Your renewal premiums were pretty inexpensive. At age 50, you may encounter quite steep renewal premiums.
  • Consider Your Health Status: Health is a huge determinant of the cost of life insurance. The older you get, the more you will pay for Term Life Insurance. If you have developed specific health conditions by then, getting new coverage will be difficult and expensive. For an individual who has been healthy for many years, renewing or acquiring a new policy may become cheaper. But if one waits too long, he may end up paying higher premiums or even get rejected based on age or health.

Review Your Dependents: If you have family and other dependents, you may need term life to support them financially in case of your death. When your term is up, you should evaluate how long, if at all, your dependents will need to have such protection. If the dependents are not older than young children, then by that time, your spouse might still need additional financial aid, or if you are the major breadwinner, coverage will guarantee your family’s financial stability.

How to Decide if You Should Renew, Convert, or Purchase a New Policy

In the case that your Term Life Insurance expires, there are primarily three courses open to you; these are as follows: converting your term into a Permanent Plan or perhaps opting to change into another kind of Permanent Cover. This analysis explores all three choices.

1. Renewing Your Policy

Term Life Insurance can easily be renewed; besides, many of the policies allow automatic renewal. However, with age, Term Life Insurance would cost more than you bargained for; in some cases, it even gets too costly. If you find that your health has declined throughout the life of the policy, renewal could be the better decision since this option does not require a medical examination.

Pros of Renewal:

  • Easy process: Many policies allow automatic renewal without requiring a medical exam.
  • Maintains coverage: You retain your life insurance protection for another period.
  • No health questions: If you’ve developed health issues, renewal may be easier than applying for a new policy.

Cons of Renewal:

  • Higher premium: The more you age, the more your renewal premium cost will be. It may not be affordable anymore.
  • Shorter coverage term: The new term could be shorter than your original policy, and premiums may continue to increase with each renewal.

2. Converting to Permanent Life Insurance

Such a benefit can be obtained by converting your Term Life Insurance to a Permanent Life Insurance Policy. Permanent Policies, such as whole or universal life insurance, can provide lifetime coverage and thereby accumulate cash value over time.

Pros of Conversion:

  • Lifetime cover: Permanent life cover will provide protection throughout your entire lifetime.
  • Cash value: The permanent cash value policy acquires a cash value on the Permanent Policies of life that one can use against loans in future times.
  • No medical exams: Many policies allow conversion without requiring a medical exam, even if your health has changed.

Cons of Conversion:

  • Higher premiums: Permanent Life Insurance is much more expensive than Term Life Insurance.
  • Complexity: Permanent Policies can be complex with investment and cash value components that require careful management.

3. Purchasing a New Term Life Insurance Policy

You can make this happen if you convert the Term Life Coverage to a policy of Permanent Insurance. Permanent types of policies usually include Whole Life Insurance Policy or Universal Life, where you can also have lifetime insurance, and while doing so, it builds cash values over time. In case when your Term Life Insurance is about to expire, and you are relatively healthy, it would be an excellent decision for you to get a new one. You might be able to take out a brand new Term Life Insurance Policy cheaper because, at this point in time, you are healthier and younger compared to when you started the insurance.

Pros of Purchasing a New Policy:

  • Lower premium: The new one is cheaper than renewing the old one, especially when one is still young and healthy.
  • Flexibility: You can choose the coverage amount and term length that suits your current needs.
  • Customized options: If the stage of life has changed your financial responsibilities, a new policy can more closely match present objectives.

Cons of Purchasing a New Policy:

  • Age-related increase: As you age, the Term Life Insurance Costs increase and you are likely to pay higher premiums than you did when you were younger.
  • Medical checks: You are required to go through a medical checkup and health check before getting a new policy.

The Importance of Consulting a Term Life Insurance Agent

It is not always an easy call, and that’s why finding a Term Life Insurance Agent for guidance will be the difference-maker. At Canadian LIC, we are constantly helping clients navigate the complexity of Term Life Insurance and ensure they make the best decision for their needs and financial situation.

  • A Term Life Insurance professional can help you
  • Review your current coverage and financial situation.
  • Compare your renewal, conversion, and new policy options.
  • Find the cheapest available premium based on age and health.

Term Life Insurance Policy Quotes to suit your needs and budget.

What Happens If You Let Your Term Life Insurance Expire Without Renewal?

Many people are letting their Term Life Insurance Policies lapse without seriously considering other possibilities. Although perhaps an easy or painless conclusion, it also leaves you open to the unknown and your loved ones unprotected. If your policy comes to an end and you never make arrangements to renew, convert, or invest in a new one, you leave yourself without life insurance coverage- and, If the worst happens, not a penny comes to your dependents from it.

Here are a few things to think about if you’re unsure of what to do when your Term Life Insurance Policy expires.

Review your responsibilities: Are there dependents left to provide for, a mortgage to pay, or other debt obligations? Perhaps it’s a good time to get back on a new plan or continue coverage on your old one.

Health check-up: You should probably take a health check-up and review the status of your health in general. If the medical report has significantly changed, you may need to explore other options besides converting to Permanent Life Insurance.

Plan ahead: Do not wait until the last minute to act on the expiry of your policy. Be proactive and make sure that your family is covered still.

Conclusion: Taking Action Before Your Term Life Insurance Expires

The Term Life Insurance Policy matures and thus must be taken into consideration as part of your future plans; crucial to you, then, would be when your policy is going to mature, as well as alternatives or options at such time. Either renewal of the policy, conversion of your policy to Permanent Coverage, or buying of a new Term Life Insurance Policy will have options; you’ll then make the most informed choice about yourself and your family.

As your Term Life Insurance Agents, we stand by to take you through this step-by-step process. It could be that perhaps your policy has run out, and you need a review of what you are receiving at the present time. Get in touch with us today so that we can give you your Term Life Insurance quotes and expert guidance. Do not allow your loved ones to be unprotected; call us today and renew your policy.

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FAQs on Term Life Insurance

This is the final date that you receive coverage; a Term Life Insurance Policy has a specific amount of time attached to it. That period varies between 10, 20, or 30 years. Once your coverage reaches the term you pre-selected, the insurance simply stops paying, and you cannot benefit unless you renew, convert, or purchase a new one.

Yes, the majority of Term Life Insurance will renew at the end of that term. Yet, Term Life Insurance does rise with age. You will have to either pass a medical exam, or you can be assured you will have drastically increased premiums.

Yes, most Term Life Insurance will automatically renew at the end of that term. However, Term Life Insurance does experience an increase with age. You will be required to either pass a medical exam, or you can be sure that you will have drastically increased premiums.

Yes, most Term Life Insurance covers you for Permanent Life Insurance cover if you need that; it’s there right before the term expires. That would mean covering your whole lifetime; however, that costs, which is a Term Life Insurance cover.

If you let the Term Life Insurance expire, your coverage is forfeited. Your beneficiaries cannot receive any money if something happens to you after this policy ends. It is better if you review what you can have before the expiration of the term.

You can call a Term Life Insurance Agent to get quotes for Term Life Insurance Policies. They will be able to analyze your needs and find the right policy that fits your budget and coverage requirements.

The best term length depends on your financial goals. Ideally, a 20- or 30-year policy would suffice for paying off a mortgage or rearing children. A Term Life Insurance Agent can help you decide on the right term for your needs.

Term Life Insurance is the best choice for you in Canada if you need coverage only for a certain number of years and do not have a fat wallet. This life insurance can be excellent for those having dependents, a mortgage, or other time-sensitive financial needs. Term Life Insurance can be given to you at a reduced price if you do not need the coverage after a certain number of years.

Term Life Insurance would be the best if you are looking to get covered for a number of years but not looking to pay too much for it. It’s very effective for those people with dependents, mortgages, or any sort of financial need that must be fulfilled within a given period in their life. It will be offered to you at a cheaper rate if you have no intention of continuing the coverage after a certain period.

Yes, you are allowed to convert or renew this policy when you are close to its expiration period. Maybe this is the moment when you opt to change your policy to some Permanent Insurance cover, renew it, or purchase another term insurance cover. Lucky for you, because the term insurance cost will simply depend on your age and even your health status.

It should indicate when it will lapse on the first page or in the contract details. If you’re not yet able to determine when your policy will be ending, check with your Term Life Insurance Agent.

A Term Life Insurance Agent knows what’s out there and can get you Term Life Insurance quotes so you can figure out which is right for you. Additionally, an agent will inform you of when it is time to renew, convert, or purchase a new policy when your policy is close to expiring.

These FAQs aim to make it easier to understand Short-Term Life Insurance Plans. For any more questions, contact trusted brokers who can walk you through the whole process of getting the best coverage for your needs.

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Sources and Further Reading

Insurance Bureau of Canada (IBC)

  • Website: https://www.ibc.ca
  • The IBC provides useful resources and information on different types of insurance, including life insurance, and how it works in Canada.

Canada Life Insurance

  • Website: https://www.canadalife.com
  • Offers a comprehensive overview of various life insurance policies, including Term Life Insurance, and their benefits.

Sun Life Financial

  • Website: https://www.sunlife.ca
  • Offers tools, guides, and detailed explanations of Term Life Insurance Policies and how they help with financial protection in Canada.

Manulife Insurance

  • Website: https://www.manulife.ca
  • Provides information on life insurance products, including Term Life Insurance, and their different terms and features.

Desjardins Insurance

Key Takeaways

  • Term Life Insurance Expiry: Term Life Insurance Policies are designed to provide coverage for a fixed period (e.g., 10, 20, or 30 years). Once the term ends, the policy expires, and coverage ceases unless renewed or converted.
  • Renewal and Conversion Options: You can renew your Term Life Insurance Policy after it expires, but the cost will increase with age. Alternatively, you may convert your term policy to Permanent Insurance for lifelong coverage.
  • Cost of Coverage: The cost of Term Life Insurance depends on factors like your age, health, and the term length. It’s generally more affordable than Permanent Insurance but rises as you get older.
  • No Cash Value: Unlike Permanent Life Insurance, Term Life Insurance Policies do not accumulate cash value, and no benefits are paid if you outlive the term.
  • Consult a Term Life Insurance Agent: Working with a Term Life Insurance Agent can help you navigate options after your policy expires, providing guidance on renewal, conversion, or purchasing a new policy.
  • Evaluate Needs Before Expiry: Before your Term Life Insurance Policy expires, assess whether you still need coverage based on your financial situation, dependents, and health status.
  • Options After Expiry: After expiry, you can either renew, convert to Permanent Insurance, or purchase a new policy. Each option has different costs and benefits.

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