What happens when my life insurance policy ends?
Key takeaways
Most life insurance policies will expire at a time set by the insurance provider
Life insurance policies won’t automatically renew, but you can sometimes extend your insurance or take out a new policy
A whole-life insurance policy has no end-date; it covers you for your entire life
Can life insurance policies expire?
Yes, life insurance policies can — and often do — expire.
Most people who take out life insurance do so to provide financial protection for their dependents; to cover mortgage or funeral costs; or simply to give themselves peace of mind that their loved ones will receive a payout in the event of their death. In most cases, these policies will last for a set period. This might be the anticipated time it will take you to pay off a mortgage or debts (often the case if you took out a mortgage or decreasing-term life insurance policy), or could be a time period set by the insurer.
When you take out a policy, you should check how long the policy is valid for. This will vary depending on the type of policy you choose, but almost all policies will have an end-date.
The exception is whole-life insurance, which is a permanent life insurance policy specifically designed to last the entirety of the policy holder’s life. Whole-life insurance policies tend to have higher premiums in line with the increased protection they provide.
How do I find out the term of my life insurance policy?
You should check your policy documents or contact your insurance provider to find out the term of your life insurance policy. You can also find out this information when getting life insurance quotes. Make sure that you review your quotes to find a policy that suits your needs.
Do I get money back if my life insurance ends?
No, you won’t get any money back if your life insurance policy ends while you are still alive. The monthly premiums you’ve paid can’t be refunded if you outlive your policy, and you also won’t receive any lump sum from your insurer.
Do I still need life insurance once my policy ends?
Whether or not you still need life insurance once your policy ends is a personal decision, and will depend on your individual circumstances.
There are many reasons why life insurance might still be a good choice, for example:
You have dependents who rely on your income
You have outstanding debts or a repayment mortgage
You want to make sure that your loved ones will receive a lump sum payout if you die
You’re concerned about funeral costs
Unlike other insurance types, such as home or car insurance, life insurance policies don’t renew automatically. You’ll need to get quotes and take out a new policy if you decide that further life insurance is right for you.
Can I extend my current policy?
It’s sometimes possible to extend your existing life insurance, but this will depend on the specific insurance provider and terms of the policy. If you want to extend your current policy you should contact your insurer to discuss options and costs.
Before extending a policy, you should consider your options and make sure that extending is the right choice for you. You should also think about:
Sometimes, extending a policy won’t be the best or cheapest option. Compare quotes to see if a new policy might be better suited to your needs.
If you want a life insurance policy that will last your whole life, you should consider taking out a whole-life insurance policy instead of extending an existing policy. This is a type of life insurance that has no end-date and will payout regardless of when you die, providing all of your monthly premiums have been paid.
Over-50s life insurance is a common type of whole-life insurance policy which might be better suited to your needs if you are in the 50-80 age group.
Depending on your specific circumstances, life insurance might not be the most suitable option. Instead of extending your life insurance, think about whether different types of insurance would better fit your needs. Some potential options include:
Funeral plans: Although not technically a type of insurance, funeral plans fulfil a similar function by covering funeral costs.
Mortgage protection insurance: Helps to cover mortgage costs if you are unable to work due to serious illness or injury.
Critical illness cover: Pays out if you are diagnosed with a critical illness, as set out in the terms of your policy.
Accidental death insurance: A cheaper type of life insurance that only pays out in the event of death resulting from an accident.
In some instances, you may decide that you no longer require life insurance. This could be because you have paid off your mortgage, no longer have any dependents, or don’t feel that a life insurance plan provides value for money anymore. In this case, you can allow your policy to expire without extending.
Purchasing a new policy
Taking out a permanent life insurance policy
Considering alternative types of insurance
Allowing your policy to expire
Can I cash out a life insurance policy?
In most cases, you cannot cash out a life insurance policy while you’re still alive. Payouts can only be made to the beneficiary in the event of the policyholder’s death. However, there are exceptions, and this will depend on the type of life insurance you have:
Term life insurance policies (life insurance policies that last for a set term) cannot be cashed out. This is because these policies don’t accumulate cash value. If they end before you die, there’s no lump sum to be paid out.
Whole-life insurance on the other hand, can sometimes be cashed out. This is because most whole-life policies have a cash value — they grow over time as you pay your monthly premiums. This means that if your balance is large enough, insurers will sometimes allow you to withdraw money or borrow funds from your insurer — however this will reduce the amount paid out in the event of your death.
You should always check your policy to see if there is a cash-out option.
Term life insurance policies
Whole-life insurance
If you’d like insurance that provides a payout option before your death — for example, if you’d like a payout if you developed a terminal illness — you should consider the following add-ons or alternatives to life insurance:
Critical illness cover: Pays out if you’re diagnosed with a critical illness within the duration of your policy.
Income protection insurance: Pays out if you’re unable to work due to illness or injury.
Mortgage protection insurance: Covers your monthly mortgage payments if you find yourself unemployed without fault or incapacitated due to illness or injury.
How could I get a new life insurance policy?
The best way to get a new life insurance policy is to compare providers and find a deal that suits you. MoneySuperMarket offers a platform to compare deals from UK life insurance providers, ensuring you find a policy that fits your needs and budget.
Can I get life insurance that doesn’t have an end-date?
Yes, you can get life insurance that doesn’t have a specific end-date. Whole-life insurance is a policy type that will only end once you die, regardless of when this is.
What’s the difference between life insurance and life assurance?
The main difference between life insurance and life assurance is the length of the policy. Life insurance tends to last for a set period, and the policy will have an end-date. It’s sometimes known as term insurance. Life assurance is designed to last for the entirety of the policyholder’s life, and pays out on their death. It’s also known as whole-life insurance.
What happens if I outlive my life insurance policy?
If you outlive your life insurance policy, your policy will come to an end, and you won’t receive a payout.
Can I make changes to my life insurance policy?
Yes, you can make changes to your life insurance policy, and should consider doing so whenever your circumstances change. This might be because you want to change the beneficiary of your policy, or because you’ve decided you’d like to change the amount of cover you have. Remember that making changes may also impact your insurance premiums.
When do most life insurance policies end?
The end-date of your life insurance will depend on your specific policy. Term life policies will have a fixed end-date set out in your policy documents. Whole-life insurance policies will last until you die.
Can I cancel my life insurance policy?
Yes, you can cancel your life insurance policy whenever you choose, however you may not receive a refund for the premiums you’ve already paid.
Insurers have a cooling-off period (usually 14-30 days after taking out the insurance) within which you can cancel and receive a refund for any premiums already paid. If you cancel after this cooling-off period, any refunds are at the discretion of the life insurance company, and you may receive nothing.
Do I need life insurance if I have death benefit?
You may still choose to purchase life insurance, even if you have death in service cover. This is a payout offered by an employer as part of their benefits package. However, you may find that it doesn’t sufficiently cover your needs. If that’s the case, you should explore further life insurance options.
