The policy simply ends
A term policy runs for a fixed number of years, often matched to a mortgage or to when your children will be grown up. On the end date, the cover stops. The insurer sends no cheque and you have nothing to cash in.
That can feel like money wasted, but think of it like home insurance. You did not lose out because your house never burned down. You paid so your family would have been safe if the worst had happened while they needed you most.
Why there is no refund
Insurers price term cover on the chance of a claim during the term. Most people outlive their policies, and that is exactly why term cover costs far less than whole of life. If every policy paid out in the end, premiums would be much higher.
A few products advertise money back at the end. These usually cost more each month, and you should compare the extra cost with what you could save yourself. Ask what you get back and when before you choose one.
If you still need cover near the end
Plans change. You might remortgage for longer, have children later or start a business. If your term is nearing its end and you still need protection, start looking well before the end date while your current cover is still in place.
A new policy will be priced on your age and health at that point. Some policies include a renewal or extension option that lets you carry on without new medical questions, so check your documents.
- Review your cover a year or two before it ends
- Check whether your policy has an extension option
- Keep the old policy until the new one starts
- Consider whole of life if the need is permanent
Choosing the right length at the start
The best way to avoid a gap is to set the term carefully when you buy. Match mortgage cover to the mortgage end date. Match family cover to when your youngest child should be independent. A slightly longer term costs a little more each month but can save a difficult search later in life.
If you want something to pass on whenever you die, such as money for a funeral or an inheritance tax bill, whole of life cover suits that better.
How Hi Tomorrow helps you plan the end date
We talk through when your debts finish and when your family's need for support is likely to fall, then suggest a term that fits. If your existing policy is close to ending, we compare what new cover would look like before you lose the old one.
We can also explain the difference in price between term and whole of life so you can decide with clear figures from real quotes. Acceptance and terms are subject to the insurer's underwriting.