What will happen when Splunk term license expires because the license is not renewed on time?
When Splunk term license expires, it will switch to Free license mode.
Indexing will continues but limited to 500MB/day and there will be a lot of limitations. Here are the limitations of Splunk Free license.
Refer here for the link to compare the free license against Splunk Light, Splunk Enterprise or Splunk Cloud license.