Coverage simply stops. On the last day of the term you selected, the policy ends — if you outlive it, no death benefit is paid, and unless your contract includes a return-of-premium rider, nothing you paid in comes back, per the California Department of Insurance’s consumer life insurance guide. You go from insured to uninsured overnight, and the burden of acting before that date sits entirely on you, not the carrier.
The four paths, and when each one makes sense
- Do nothing. The policy lapses on schedule. Right when the obligations it protected — mortgage, dependents, income — are genuinely gone; wrong when they aren’t.
- Renew annually, if the policy allows it. No new health questions, but the premium resets every year on your attained age and climbs quickly. A short bridge, not a plan.
- Convert to a permanent policy. A conversion privilege exchanges term coverage for lifetime, cash-value coverage, usually with no exam, per the NAIC. Premiums are set at your age at conversion — higher than the term rate you were paying — but conversion is guaranteed regardless of health, which makes it the most valuable path when a diagnosis would complicate new underwriting.
- Apply for a new policy. If your health is still good, a freshly underwritten term policy sized to today’s smaller obligations is often the cheapest way to keep coverage — and it’s worth pricing before the old policy ends, while the conversion option still exists as a fallback.
The deadlines are the whole game
Conversion windows commonly close at the earlier of a set age — often 65 or 70 — or the end of the level term, and some contracts close them 90 days before the final policy date. Check the declarations page for the “conversion privilege” section a year or more before your term ends; once a window closes or a policy lapses past its grace period, those options do not reopen.
The actuarial reason not to drift past the date: the Social Security Administration’s 2023 period life table shows one-year mortality risk roughly doubling each decade after 45, which is exactly why every replacement path costs more each year you wait.
The full mechanics — renewal math, a worked 2006-policy example, and what to do if your health has changed — are in What Happens When Term Life Insurance Expires in 2026?.