What Happens After a 20-Year Term Life Insurance Plan Ends?

Everything is planned and going on as per plan. You got married at 27, had 2 kids by 30, and purchased a flat at 31. You go on vacation every year and are also planning for your children’s careers even as you climb the corporate ladder to earn more name, fame, and wealth. All is well until everything is well in the jigsaw puzzle of life. What if one piece of this puzzle goes missing? 

Household appliances come with guarantees, but, unfortunately, for life, we must prepare beforehand. Life insurance is one instrument that can offer your family the financial security necessary to meet daily bills and achieve its goals. Life insurance, especially term life insurance, is a guarantee that the loved ones will have a sum assured even during times of misfortune.. Let’s understand this better ahead.

Term life insurance provides insurance coverage for a specific period. Hence, it is known as “term insurance”. In case of unfortunate demise during the term period, the beneficiary is given the “Sum Assured”. 

Term insurance is availed by paying a fixed amount, at pre-defined intervals, called premiums. Premiums have to be paid, without fail, to avail of the full benefits that are offered under any insurance policy.

Learn: how does a term insurance plan work.

What Happens When Your Term Plan Expires?

Depending on the type of term cover you had, if the plan expires, you may face any one of the following situations:

• The plan expires without a maturity value, and the life cover benefit ends

• You may receive an amount equal to the total premium amount you paid for the term cover

The second option is possible when you buy a term plan with a return of premium option. For example, if you buy a 20-year Term cover of ₹1 crore, with the return of premium option, and your premium is ₹20,000 p.a., you will receive ₹4 lakhs at the expiry of the plan.

How Does Term Life Insurance Expire and What’s Next?

Term policy expiration has primarily two causes. In the event of an unfortunate demise before the policy's expiry date, the nominee receives the Sum Assured, also known as the Death Benefit. This is one way a term policy can expire.

On the other hand, in case of an unexpected demise after completion of the term, the Sum Assured may or may not be paid, depending on the terms and conditions of the specific policy. Now, for the way forward, you can renew or buy a new term insurance policy if the insurer’s rules allow. However, the new premium will depend on the age and health at the time of renewal.

Premiums are calculated based on the person’s health, age, and Sum Assured. A health check-up may be triggered depending on the level of risk assessment. Moreover, premiums are fixed and payable for the entire length of the policy term.

What Is the Ideal Length of a Term Life Insurance Plan?

When exploring term insurance plans, you must go for the one that meets your needs and life circumstances. Some insurance companies may provide coverage until the age of 99, whereas others may offer coverage only until 75.

The length of tenure of a term insurance plan is as important as the Sum Assured amount offered. If your family does not get the money because of the age criterion, the entire purpose of availing of a policy is defeated.

What do We Offer?

iSelect Smart360 Term Plan by Canara HSBC Life Insurance is a robust and comprehensive policy covering the most probable scenarios as listed below: 

• Term Cover: This is the most fundamental option if you have just set out on your journey to explore life insurance products.
  
  For example, Mr Ramesh, aged about 40 years, is comparing term life insurance plans. His wife, Rashmi, 37 years old, is also keen to have her policy. Both can opt for separate policies, and in the event of any unfortunate occurrence, the other would receive the Sum Assured. In the iSelect Smart360 Term Plan by Canara HSBC Life Insurance, Ramesh and Rashmi can opt for a joint policy, which will be cheaper than buying two separate individual policies.
• Whole Life Term Cover: Both death and terminal illnesses are covered under this option. If Ramesh is diagnosed with a terminal illness at 45, the Sum Assured would be paid to Rashmi, and the policy will close. If Ramesh is hale and hearty until the maturity of the policy, all the paid premiums would be returned to him, but the policy would continue until Ramesh attains 99 years of age. At the age of 99, Ramesh would get the Sum Assured, and then the policy would cease.
• Term Cover with Return of Premium: If Ramesh, aged about 40 years, dies before completion of the policy term, his spouse Rashmi would get the Sum Assured. However, if Ramesh outlives the policy term, all the paid premiums would be returned to Ramesh.
  
  Learn about a term insurance plan with return of premium.
  
  iSelect Smart360 Term Plan by Canara HSBC Life Insurance comes with a plethora of options to meet the diverse needs of different types of people, and at an affordable cost. Some of the salient features:
  1. Option to cover for a term or your lifetime
  2. Add riders such as Accidental Death Benefit, Accidental Total, Child Support Benefit, and Permanent Disability Benefit
  3. You can take up a joint policy along with your spouse at a discounted rate
  4. Gradually step up Sum Assured and Premiums along with age to meet your life’s changing needs
  5. Special premiums for women to ensure inclusiveness
  6. Tax benefits and loyalty discounts

Thus, you should choose a term plan as per your objective at the maturity of the plan. The difference between the benefits of these plans also affects their cost. However, it’s only a fraction of the benefit amount.

Conclusion

A 20-year term insurance plan acts like a safety net through life’s most demanding years, helping your family stay financially protected if life takes an unexpected turn. But what happens when the term ends? Your next steps matter. Whether you renew the plan, convert it, or invest in a new one, the decision should match your current responsibilities and future needs.

If you’re considering a plan that gives you control, flexibility, and benefits that grow with your life, the iSelect Smart360 Term Plan by Canara HSBC Life Insurance can be a great option. From lifelong cover to return of premium benefits and spouse coverage, it offers the protection your family deserves with customisation you can trust. 

Secure your peace of mind today so that your family never runs out of options, even after your policy ends.