What happens when your Term Insurance expires? Options to consider in 2026

Your Term Insurance provides life cover for a defined policy term. When that term ends, the policy normally reaches its maturity or expiry date and the life cover under that policy ends, subject to the terms of the policy. The right next step depends on why you bought the cover, whether anyone depends on your income, your outstanding liabilities, your health, and how long your financial responsibilities will continue.

In 2026, this review is also worth doing in the context of changing tax rules and the current Insurance regulatory framework overseen by the Insurance Regulatory and Development Authority of India (IRDAI).

What should you do when your Term Insurance is about to expire?

Start by asking one question: do you still have a financial need that your Life Insurance should cover? If yes, consider:

• Renewing the existing policy, if renewal is available.
• Buying a new Term Insurance Policy for the cover period you need.
• Converting the policy, if a conversion option is available.
• Letting the policy end, if you no longer need cover.
  
  

Your policy document will specify whether renewal or conversion is available and the applicable conditions.

Should you renew your Term Insurance after it expires?

If you still have dependents or major liabilities, review your options before the cover ends. If renewal is available, check:

• How much cover do you still need?
• How long do you need the cover?
• The premium applicable at renewal
• Whether the renewal terms change with age
• Whether the policy requires additional underwriting
• Whether your existing policy has a conversion facility
• Whether a new policy could better match your current needs

Is buying a new Term Insurance Policy after expiry an option?

Yes. If you still need life cover, you can apply for a new Term Insurance Policy, subject to the insurer's eligibility and underwriting requirements. A new policy may make sense if your needs have changed, such as a larger Home Loan, additional dependents, higher income, or a longer period of financial responsibility. Your age and health may also affect the premium and underwriting outcome. Review your options before the existing cover expires.

Can you simply extend your existing Term Insurance?

Only if the policy provides an applicable renewal or extension facility. Term Insurance is not automatically open-ended. Check your policy document for renewal conditions, maximum renewal age, applicable premium, conversion provisions, notice requirements, and any underwriting or medical requirements.

What if your health has changed since you bought your Term Insurance?

This is one reason not to wait until the last minute to review your cover. If your health has changed, a new application may involve underwriting based on your current health profile. An insurer may request medical information, reports or tests. Your current health can affect the underwriting assessment and applicable terms. If your existing policy has a renewal or conversion facility, compare it with a new policy before the existing cover ends.

How should you decide how long you still need Term Insurance?

Look at the financial responsibilities that would remain if your income stopped.

Does Term Insurance provide any tax benefit after the policy expires?

Tax treatment depends on the payment and applicable tax law. For Term Insurance, the death benefit received by the nominee is generally exempt from income tax, subject to applicable conditions. Earlier, this exemption was covered under Section 10(10D) of the Income-tax Act, 1961. Under the Income-tax Act, 2025, it is addressed under Section 11 read with Schedule II. Expiry does not create a tax payout under a regular pure Term Insurance Policy. For products with maturity or Return of Premium benefits, check the specific policy terms and prevailing tax provisions.

What happens if your Term Policy lapses before it expires?

This is different from reaching the end of the policy term. If you stop paying premiums beyond the applicable grace period, the policy may lapse or enter another status, depending on the product terms. Many current ABSLI Term Insurance Plans provide a five-year revival period from the due date of the first unpaid premium, subject to conditions such as payment of outstanding premiums with applicable interest or late fees, satisfactory evidence of insurability, and approval under the insurer's board-approved underwriting policy.

Revival terms and interest are product-specific, so check the policy document and current insurer declaration. If the policy is not revived within the permitted period, it may terminate according to its terms.

What should you check six months before your Term Insurance expires?

• Check the exact policy maturity date.
• Review who currently depends on your income.
• List your outstanding Loans and liabilities.
• Check your existing Life Insurance cover.
• Review your assets and savings.
• Check whether your policy provides renewal or conversion options.
• Review your current health and financial situation.
• Calculate how much cover you may still need.
• Compare the cost and terms of available alternatives.

What are the common mistakes people make when their Term Insurance expires?

• Assuming the policy renews automatically: Check the actual renewal provisions.
• Waiting until after expiry: Start the review early if you still need cover.
• Buying the same cover without reassessing the need: Your income, liabilities, dependents, and assets may have changed.
• Looking only at the premium: A cheaper policy may have a different cover structure, term, or benefits.
• Ignoring employer-provided cover: Group cover may be linked to employment and should be reviewed separately.
• Forgetting outstanding Loans: A liability that influenced your original cover may still exist.
• Assuming a new policy will have the same underwriting outcome: Age and health may have changed since your original purchase.

What should you do if your ABSLI Term Insurance is nearing expiry or has lapsed?

If your ABSLI Term Plan is nearing its expiry date, start by checking whether you still need life cover and for how long. If you still need cover, you generally have three situations to consider:

• Your policy is nearing expiry: Review your current protection needs and explore whether a new term insurance policy is appropriate. You can use the ABSLI Term Insurance calculator to estimate the premium for the cover you may need.
• Your policy has expired: If revival is no longer available or does not suit your current needs, you can review the Term Plans based on your age, desired cover, policy duration, and financial responsibilities.
• Your policy has lapsed: Check whether the policy is still within its applicable revival/grace period and reinstate your ABSLI Policy.

Also Read

• What Is Term Insurance and How Does It Work?
• Term Insurance for Young Salaried Professionals
• What Are Term Insurance Riders?
• How to Protect a Home Loan With Term Insurance
  
  

References

1. IRDAI, Insurance Regulatory and Development Authority of India, applicable life insurance regulations and policyholder protection framework.
   
2. ABSLI, current term insurance product information and policy terms.
   
3. ABSLI, current FY2025-26 claims disclosure.
   
4. ABSLI, current term insurance calculator and product pages.