My term policy is ending. What are my options?

Three: let it end if the need is gone (kids grown, mortgage paid); convert some or all of it to permanent coverage without health questions before the conversion deadline, if you now have a health problem; or re-shop a new, smaller term policy if you are still healthy, which is usually cheaper than converting.

Is it a bad idea to cancel whole life insurance?

Sometimes, and the order matters. Ask for an in-force illustration first, check the surrender charge, and price a replacement. If the policy is doing a job you still need, keep it; if not, a reduced paid-up option or a 1035 exchange may beat a straight surrender. Never cancel before a replacement is in force.

Can I borrow against my life insurance?

Against a whole, universal, or indexed universal policy with cash value, yes, at the carrier's loan rate and without a credit check. Unpaid loans reduce the death benefit, and a policy that lapses with a loan outstanding can create a taxable gain. Term policies have no cash value to borrow against.

Written by PolicyChat Life, a licensed life insurance agency. Estimates come from the same pricing tables our chat, Sage, uses; they are not quotes. Updated 2026-09-18.

Last updated September 2026 · PolicyChat Life.

Should I cancel, convert, borrow against, or replace my life insurance?

Short answer. First find out what you have, then decide. A term policy that is ending: let it go if the need is gone, re-shop if you are healthy, convert if you are not. A whole or universal policy: get the in-force illustration and the surrender schedule before touching it. A work policy: it ends with the job; own a replacement first. In every case, the new policy is in force before the old one stops.

One in five life insurance conversations people have with an AI assistant is about a policy they already own. This is the checklist a good agent runs.

By policy type

What you have	First question	Common right answer
Term, ending soon	Is the need still there?	Re-shop a smaller term if healthy; convert part before the deadline if not; let it end if the job is done
Term, mid-term, health improved	Quit tobacco a year ago? Lost weight?	Re-shop; a better class can cut the premium substantially
Whole life	What does the guaranteed column show?	Usually keep; consider reduced paid-up if premiums hurt
Universal / indexed universal	Will it lapse at the current premium?	In-force illustration; fix funding or exchange; never let it lapse with a loan
Group through work	When does the job end?	Own individual term before leaving; convert only if uninsurable

Borrowing against cash value

Policy loans need no credit check and are not taxed while the policy stays in force. The loan accrues interest; unpaid, it reduces the death benefit; and if the policy lapses with a loan outstanding, the gain becomes taxable income in that year. Borrow with a plan to repay or to keep the policy funded.

Replacing a policy

A replacement restarts the two-year contestability and suicide windows, and a new health screen may rate you differently. The math that decides it: new premium for the same death benefit, versus what you pay now. If you are healthier than when you bought, replacement often wins; if you are less healthy, keeping or converting usually wins.

What Sage does with this

Tell Sage what kind of policy it is and how much. It sizes the gap or the overlap, prices a replacement for your likely class, and notes the audit points for that policy type. A PolicyChat agent can read the actual policy with you.

See your own number. Sage sizes the coverage, asks three plain health questions, and shows the price range you'd actually get, before anyone asks for your phone number.

Ask Sage: I have a policy, check it or re-shop it

PolicyChat Life is a licensed life insurance agency. Every policy comes with a free-look period, usually 10 to 30 days depending on your state, with a full refund.