Does Life Insurance Expire At A Certain Age?

Some types life insurance policies expire after a certain period of time, while others don't. It depends on the type of policy.

If you have a term life insurance policy, your policy will expire after the term you selected ends. If you have a permanent life insurance policy (like whole or universal), your policy will remain in force as long as you continue to pay the premiums on time and in full.

When Does Term Life Insurance Expire?

Term life insurance is simple to understand — you select a death benefit amount and a “term”, or length of time the policy will be in force. Terms can be as short as one year or as long as 30. If you pay your premiums on time and die while the policy is in force, your named beneficiary(ies) will receive the death benefit you selected.

Term policies expire when the term ends. So, if you selected a 20-year term life policy, the policy expires 20 years after it went into force. If you outlive your policy, your beneficiaries won’t receive a death benefit and you won’t receive any money in return, unless you have a “return-of-premium” policy.

If you’re interested in hanging on to your term policy after it expires, it might be possible to convert it into a permanent policy. Keep in mind, there’s usually a certain time period during the life of the policy that allows you to do so. If you don’t want to do that and are healthy, you could consider just buying a new term policy or another type of life insurance.

What About Permanent Life Insurance?

Permanent policies are designed to cover you for your entire life. However, there is a caveat if you live a long life. Permanent policies — whole life being the most common variety — accrue cash value over time. (Term policies do not accrue cash value).

If you live long enough, your policy will eventually “mature.” When you reach the age of maturity, your policy will pay out the cash value of the policy and your life insurance coverage ends. A benefit paid out upon your death isn’t considered taxable income for your beneficiaries. A payout received because of maturity would be taxable, though — a drawback.

Many policies today are set up to mature at age 121, in response to longer life expectancy. However, older policies may have a maturity age of 100.

While it’s highly unlikely you’ll live to 121, some people with older policies are living to 100 and are encountering this issue with permanent life insurance. So it’s something to ask your agent about when shopping for a permanent policy.