What happens if you outlive your life insurance?

If you can hear the clock ticking down for your term life insurance policy coming to an end, and you’re worried about not having financial protection, you will have options.

It depends on the type of life insurance policy you have. If you chose a term life insurance policy, then yes, these will expire. But if you chose a whole of life policy, then these provide coverage up until you die with no expiry date.

When your term life insurance policy ends, your cover also comes to an end. There is no automatic renewal, because you buy life cover for a set period of time, and only that set period of time. When you took out the policy, you'd have confirmed how many years you wanted it to last. That length of time is called the 'the term'. Once the agreed term has finished, your cover will stop. And typically, term life insurance is not a savings or investment product, so they’ll only pay out on a successful claim. This means you won't get back any of the money you've paid over the years.

If your term life insurance has reached its end, it may be worth thinking about why you took out cover in the first place, as your circumstances may have changed. Your children might be financially independent now, or your mortgage might be paid off. If no-one relies on your income anymore, you might decide you no longer need life insurance.

It may be important to you that, should the worst happen to you, your loved ones would receive a lump sum payout. If you’d prefer to keep some protection in place, you may want to consider:

• taking out a new term life insurance policy.

• choosing a whole of life insurance policy like Over 50s.

It's worth considering that premiums on a new policy could be more expensive because of your age and/or health, and may come with different terms and conditions to your last.

These products work differently and are designed to provide varying levels of cover. For example, term life insurance could help towards taking care of your finances when you’re no longer around, making it one less thing for you, and the people you leave behind, to worry about. Over 50 life insurance could provide some money towards a funeral or general bills, it isn't designed to protect your dependents or take care of finances.

Our Life Insurance Plan pays out a lump sum if you die during the policy term. It offers two different types of cover. With our level cover, the pay-out amount stays the same, while with our decreasing cover option, the pay-out amount decreases each month. You can compare the types, reflect on what feels right for you, then choose the length of cover you'd like. There’s also increasing cover (or indexation), where the amount your policy covers will grow each year. You have to be between 18 and 77 to apply. In most cases, there won’t be a medical exam, but we'll need to know about any pre-existing medical conditions that we ask about. 

Our Life Insurance Plan has no cash-in value at any time. This means, if you no longer want the cover and cancel it, or if you stop paying your premiums, your cover will end and you won't get back any of the money you've paid in.

Our Over 50s Life Insurance guarantees to pay out every penny of the cover amount as a lump sum if you die for any reason after the first 12 months of having the policy – or if you die because of an accident within the first 12 months. However, if you die within the first 12 months, and it isn’t an accidental death, we won’t pay out the cover amount, but we’ll pay a sum that’s equal to the premiums that have already been paid.

Our Over 50s Life Insurance is not a savings or investment product, and it will only pay out on a successful claim. If premiums aren’t paid when due or if the policy is cancelled the plan will end and you'll get nothing back. It’s also worth noting that the total amount you’ll pay for cover will depend on how long you live for, so you could pay in more than what’s paid out. Your cover amount is fixed, and so inflation can reduce its value over time. 

Generally, you can’t extend your term life insurance policy once it’s already expired. However, you might be able to make amendments to your policy and extend it while it’s still active. You’ll need to check with your insurer if this is possible as they may ask you for additional information or ask you to go for a medical exam.

If you survive your policy term, you won’t receive a refund on the money you have paid, you’ll also not receive a payout.