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

At the end of a life insurance policy term, it is common for the insured's policy to expire. Term life insurance is specifically designed to provide coverage for a predetermined period, known as the term. If the insured does not pass away during that term, the coverage ceases to exist once the term ends. Unlike whole life or permanent insurance, term life does not accumulate cash value, and therefore, no payout or refund is guaranteed at the conclusion of the term unless the insured has chosen a renewal option, which is not always available or may come with additional costs.

This outcome highlights the defining characteristic of term life insurance: it is temporary in nature and solely provides a death benefit during the specified period. Knowing this helps individuals understand their options and the implications of choosing a term life policy as opposed to permanent life insurance products.