What happens to term life insurance at the end of the term?

When speaking about the end of term policy, we refer to the end of the policy period. Let’s say, you took a term plan at the age of 30 for 30 years. When you turn 60, you have reached the end of the term plan and it terminates.

Premium payments for the term policy are either:

• Regular pay (paid until the end of the policy term) or 
• Limited payments (paid for a fixed number of years say 10, 15, or 20 years) 

Either way, when you reach the end of the term plan, all your premium payments will be complete. If you survive the term, then the premiums you have paid remain with the insurer and you don’t receive any cash benefits. On the other hand, if you meet an unexpected death during policy term, the insurer pays the sum assured to your beneficiaries. However, if you have taken a TROP (Term Return of Premium) plan, the premiums you paid are returned in full or partially, at the end of the term.

Remember that term plans are pure life insurance and there is no savings component. You do not receive any survival benefits. It is important to view term insurance as an insurance product. It should not be confused with an investment policy, where you enjoy returns at the end of the term.