Life is full of unanswered questions. Luckily, what happens to your life insurance policy when it expires won't be one of them because we have the answer.
But, like lots of other existential questions, there isn’t a quickie one sentence answer because what happens really depends on the type of policy you have in the first place. Here’s the lowdown.
Traditionally, there are two main types of Life insurance? — term life and whole of life. Term life covers you for a specific length of time which typically ranges from 5 to 25 years. When that period ends, so too does your policy — poof! Just like that. Whole of life policies on the other hand, do exactly what you expect them to do and last...well...for the whole of your life. Technically speaking, that means they never expire (until you do).
If you’ve got a whole of life insurance policy, the payout doesn’t expire. Depending on the terms set out in your policy, it’s pretty much guaranteed to cough up when you kick the bucket — leaving your loved ones (or the cats home) with a lovely bundle of money.
On the other hand, term life insurance payouts expire at the end of the specified term. In other words, if your policy expired on Monday but you died on Tuesday, it wouldn’t pay out — yep, tough call. Of course, if you’ve renewed your plan or bought a new one to replace it, then you’re sorted until the next term ends.
If you succumb to life’s final frontier while your policy is active, it will pay out to whoever you’ve named as your beneficiary. After that, your policy will follow in your footsteps and expire.
When your term life insurance comes to an end, you can do one of three things:
If your term policy is nearing the end but you’re still here (congratulations) you should be able to extend the length of your policy. We say ‘should’ because it ultimately comes down to the rules you agreed to when you bought your plan.
Flexible policies (like ours) take into account that life is a rollercoaster and it’s pretty much inevitable that you’ll want to make changes — whether that’s extending or refreshing your policy, updating your beneficiary or specifying a cash payout. You just need to remember that amendments can also mean your premium changes too.
On the flip side, some policies just aren’t as accommodating. That means you might have to pay to make changes or you might not be able to make any changes at all.
Tough question, and fundamentally, it boils down to what you want your life insurance policy to do. For instance, if it’s to pay off your mortgage, the term needs to be long enough to see that event through. So, if you’ve got another 15 years on your mortgage and you want the policy to pay off the outstanding amount, you might decide a 15 year term is all you.
If you consider your life insurance as a long-term investment for the folks you leave behind and also want it to pay for a top notch send-off loaded with bells and whistles, whole of life insurance may well be the right policy for you.
Life insurance can be complicated and costly. If that’s your thing, you’re in luck. A bunch of companies are only too eager to make you pay too much, spend too long form filling and perplex you into staying put. It’s easier for them that way. It’s enough to put you in an early grave.
Truth is, everyone needs unique life insurance. Based on who you are today and what you really want to happen when you die and a policy that can adapt to the twists and turns of life. That’s why we created DeadHappy. We’re nice, like that.
What you’ll notice is that we’ve create a life insurance that’s really easy and really quick to buy and likely, really cheap compared to your usual suspects. With just 4 questions you can probably get covered online in around 4 minutes.
We’ve also been rated 4.9 stars out of 5 on Trust Pilot. If you’re interested in reading more about what our customers have to say (they’re a fun bunch), why not hop over to our to our reviews page for a sneaky peek?
We’re not financial advisors, but we are regulated by the FCA. Our FCA status means that whilst we can’t advise you what to buy, or which insurance is right for you, we can give you as much information as possible to make your own decisions on which product may or may not be best for you. If you’ve any questions you can always chat to our Honchos, they’re here and happy to help.
With our streamlined application process, we only 4 quick health based questions. It's really that easy...