What happens at the end of your term life insurance policy?
All good things come to an end, or so the old saying goes, and if you’re nearing the end of your life insurance policy, you may be wondering what to do once that final date has passed.
Of course, in one sense, the fact you’ve outlived your life insurance is a good thing. As with most insurance, the hope is that you’ll never actually have to use it.
But what happens if you want continued life cover after your policy ends? What are your options? What are the costs? In this article we’ll outline your options.
Do life insurance policies expire?
Yes, a term life insurance policy provides cover for the length of time you choose. When your policy ends, your cover will simply stop rather than automatically renew.
There is such a thing as ‘whole of life’ insurance –which provides lifetime coverage without an expiry date. However, these policies are generally only sold through advisers and are likely to be more expensive due to the indefinite policy length.
When does the term on my life insurance end?
The end date of your life insurance ‘term’ – the length of time your cover lasts - depends on how long you chose when you took out the policy. If you’re not sure when exactly your cover comes to an end, take a look at your policy document.
You can take out Legal & General Life Insurance until age 77, or 74 for Decreasing Life Insurance. However, if you decide to add Critical Illness Cover when you take out your policy, the maximum age is 67.
It’s worth remembering that your Life Insurance or Decreasing Life Insurance policy must end by your 90th birthday. You can refer to your Policy Summary and Policy Booklet for more information on eligibility criteria.
Do I still need life insurance once my policy ends?
Once you know when your cover is due to end, it’s worth asking yourself whether you’ll actually need further life insurance. It’s quite possible that your circumstances will have changed since you originally took out your policy, and the factors that led you to buy cover years ago may no longer apply.
Children, mortgages, and a lack of long-term financial security are some of the main reasons people buy life insurance – it gives them peace of mind that outstanding debts or expenses could be covered if they die during the length of the policy. But if your children have grown up, your mortgage has been fully repaid, you outlive your life insurance and you’ve accumulated other financial assets or savings, you may find that it makes little sense for you to continue paying for life cover after your existing policy has come to an end.
We encourage you to speak with a financial adviser if you’re unsure.
Buying another policy
If you decide that taking out a new life insurance policy is the best option for you, you should bear in mind that all things being equal, your premiums are likely to be higher than they were for your original policy now that you’re older.
As with all new policies, you’ll need to complete a full application before we can determine whether we can offer you cover. This includes a full medical and lifestyle assessment.
Eligibility will also depend on your age.
Can I extend the length of my Legal & General life insurance policy?
Yes, you can apply to extend the length of your policy. Your life insurance is only ‘renewable’ before the policy term ends, so it' sensible to think about your current situation before the policy ends.
It’s understandable if you wish to renew your life insurance in certain circumstances, such as buying a property or re-mortgaging, for example. However, you should be aware that extending your life insurance could affect the amount that you pay, and we would have to assess any change request based on your circumstances at the time.
Find out more about changing or rearranging your Legal & General Life Insurance policy.
Do I get money back if I don’t die before the life insurance policy ends?
No, with a standard term life insurance policy, you won’t be receive anything back if you outlive your life insurance. So, what happens at the end of your term life insurance? Your life insurance will simply expire and you can either take out a new policy or look into other types of financial protection.
Other life cover options from Legal & General
If your existing life insurance is nearing the end of its term and you’re a UK resident between 50 and 80 years old, our Over 50s Life Insurance may be an option worth considering.
Our Over 50s Fixed Life Insurance could allow you to leave a fixed cash sum to your loved ones when you pass away (if this is within the first year we only refund your premiums, unless you die as the result of an accident), which could be used to help contribute towards your funeral costs or be left as a gift.
If you’re nearing the end of your existing life insurance term, it’s worth taking some time to think about your need for life cover once that date has passed, given that your situation and your life insurance needs may be very different to when you first took out your plan.