What occurs at the end of a term life insurance policy?

At the end of a term life insurance policy, the coverage generally ends unless the policyholder takes specific actions such as renewing or converting the policy. Term life insurance is designed to provide coverage for a specified period, typically ranging from 10 to 30 years. Once that term expires, the policy does not provide any benefits or coverage unless the policyholder opts to renew the policy or convert it to a different type of insurance, like whole life.

Renewal often comes with a higher premium, reflecting the insured's current age and health status, while conversion allows the policyholder to transition to a permanent life insurance policy without undergoing a medical examination. Understanding this cycle is crucial for managing life insurance needs effectively, as the conclusion of a term policy without taking further action means that the insured is no longer covered for death benefits.

The other options do not accurately describe the typical end-of-term scenario for life insurance policies. For example, automatic conversion to a whole life policy usually only happens if the policy specifically includes such a provision. Refunding premiums is not standard practice since term insurance is designed to provide protection without accumulating cash value. Similarly, an increase in death benefits is not characteristic of term insurance once a policy reaches its maturity without conversion.