If you have a term life insurance policy, or you are considering one, you probably already know that you pick the length of time you’re covered. The most common term life insurance policies cover you for 10, 15, 20 or even 30 years. Or, term life insurance may cover you up to a certain age, say 80.

But what happens to term life insurance if you don't die before the end of the term? To answer that, it’s important to understand exactly how term life insurance works.


When you get a term life insurance policy, you are getting life insurance that will cover you for a specific period of time. Once you have coverage, so long as you pay your premiums, you will be insured. If you die while you are insured, your beneficiaries will get the death benefit.

If you’ve made it to the end of your term and you haven’t died (let’s hope this is the case), then typically one of two things happen: The policy will simply end and you’ll no longer be covered, or your insurer may allow you to convert all or a portion of the policy into permanent life insurance.

Generally speaking, term conversion is available on many term life insurance policies during a specified time frame. It’s a good idea to check your policy as soon as possible because with certain policies, the period in which you can convert it may end many years before the policy expires.

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If you do choose to convert your policy, the good news is that, so long as you pay your premiums, you will continue to carry life insurance. Better yet, your policy will begin to accrue cash value with each payment that you make. That’s money that you can eventually access for a variety of purposes.


Term life insurance is a popular option for many people because it offers significant levels of coverage for relatively low premiums compared to a permanent policy with a similar death benefit. The tradeoff, however, is that your term coverage will end someday.

If you’re trying to decide between a term or permanent life insurance policy, it’s important to understand how life insurance fits into your overall financial plan. It’s not an all or nothing decision, as many people purchase both term and permanent insurance. Combining both types provides the affordability of term while accessing additional benefits and lifetime coverage of a permanent life insurance policy.

If you already have term coverage and are approaching a conversion period or the end of your term, take some time to explore what options are available to you and consider whether converting all or some of your policy into permanent life insurance makes sense for your situation.

Life insurance is an important component of financial security, so it’s important to consider all of your options before making such an important decision. A financial advisor can help you understand the role that both term and permanent insurance can play in your financial plan, and guide you to the right decision for your unique situation.

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