What you should do when your term policy is about to expire depends solely on your financial situation at that time.

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Do I still need insurance coverage?

If the answer is no, you can simply let the policy expire and go without insurance. This can be a viable option for people with financially-independent children and sufficient financial assets to take care of their spouse or partner.

However, if you realize you still need protection, basically there are three options in front of you:

• Renew the term life policy

Most term life insurance policies come with the guaranteed renewability feature. It lets you renew your term policy without taking another medical exam and going through a new underwriting process. You can renew your term policy up to a certain age, but expect premium rates to go up at every renewal.

• Convert to a permanent life insurance policy

Many term life policies feature a built-in rider called a term conversion rider. It gives you the ability to exchange your term life policy for a permanent life insurance one. You won’t have to submit proof of insurability and can exercise the option up to a certain age limit, which may vary from one insurer to another. This may be especially helpful for seniors looking for a guaranteed payout.

• Purchase a new life insurance policy

Has your insurance needs changed over the years? Perhaps you now have more money in your savings fund and don’t require the same amount of insurance coverage. Or maybe your family has got bigger and you now need more protection? The insurance policy that was right for you earlier may not be appropriate for your current needs. You can fix this by getting a new policy.

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