What happens to a term life insurance policy at the end of its term?

At the end of its term, a term life insurance policy typically expires without any payout to the owner. This is because term life insurance is designed to provide coverage for a specified period, known as the term. If the insured individual does not pass away during that term, the policy does not have any value at its conclusion. Unlike permanent life insurance, which can build cash value and remain in force for the lifetime of the insured, term life provides a straightforward death benefit only if death occurs within the specified time frame.

Once the term is over, the policyholder may have options, such as renewing the policy or converting it to a permanent policy, but these actions do not guarantee a payout; they are additional pathways available to continue coverage. Therefore, the correct understanding is that the policy simply expires without any benefit being distributed to the owner if the insured is still alive at the end of the term.