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When Should I End My Term Insurance Policy?

Aakansha Jain
By Aakansha Jain
Research & Content Ninja at Beshak
7 user ratings

You purchase a term insurance policy for your loved ones who depend on your earnings for their expenses. You buy it with the objective that it will provide them with financial security in case you pass away during the policy term. But once you’ve completed all your short and long-term financial responsibilities and no longer have any financial dependency, it makes no sense to continue your term insurance.

This is why we recommend that you must have term insurance from the point in life when you have financial dependents to the point you become financially free. But, what does becoming ‘financially free’ mean? 

Let’s find out.

Generally, you become financially free when: 

👉 No one relies on your earnings for their expenses anymore

Meaning, your spouse, children, siblings, parents, and all those who used to depend on you for their expenses have now become financially independent (or have passed away). Usually, this will happen by the time you reach the age of 65 or 70. Therefore, generally, it’s recommended that you take a term insurance policy until 65-70 years. However, this could vary depending on your preferences, life choices, and family priorities. So, make sure you don't blindly follow any thumb rule and decide this based on your life plans.

👉 You’ve built a solid corpus for a lifetime

The sole purpose of purchasing term insurance is that your family doesn’t have any financial burden in your absence. So, if you’ve created enough wealth that will last a lifetime - it will help your family deal with the finances both in the short and long term and take care of all their financial needs. And, you won’t need the term plan anymore. You can simply stop paying the premiums and the policy is closed.

👉 You’ve fulfilled all your financial responsibilities

Meaning, you’ve had financial responsibilities in the past, and fulfilled them all. For example, you’ve paid off your children’s higher education fees, repaid all your loans and liabilities, paid off for your children’s marriage, etc. 

Let’s look at some examples to gain a little more clarity - 



  • 60 years old, married, working
  • 2 children, both married
  • No financial dependents
  • Paid off home and business loans
  • Has enough savings to support their family for at least 40-50 years
  • 40 years old, married, working
  • 1 son, unmarried
  • The son plans to do an MS in Canada (after 5 years)
  • Wife is unemployed and relies on his income for her expenses
  • Home loan still has EMIs to be paid for the next 12 years

From the above examples, it is clear that Rahul is financially free. Hence, he won’t need term insurance. Amey, on the other hand, still has financial dependents as well as pending responsibilities. Hence, he is not financially free yet - and should continue keeping his term insurance plan until he becomes financially free. 

Summing up!

A term insurance policy is not required forever. You only need it from the point when you have financial dependents till you become financially free. You can stop it once you have created a sufficient corpus, fulfilled all your major financial responsibilities, and don’t have any financial dependents.

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Key takeaways
  1. You don’t need to take term insurance until your death. You can stop it once you become financially free.
  2. You become financially free once you have created enough wealth to support all your family's needs, don't have any financial dependents, and fulfilled all major financial responsibilities.
How did you find this article?
Aakansha Jain
Aakansha Jain, Research & Content Ninja at Beshak

Aakansha is a Content Ideator and Writer at Beshak. With her easy-to-understand content, she makes insurance simple for everyone. She comes with a strong background in finance and commerce and wants to help families make positive insurance decisions that are good for a lifetime.

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