good question!
the program will actually alert you when you try to update using live update that you only have 60 days before your free updates are up. if you don't get the message then you can just carry on with the normal updating.
I think that randypj is right. I've never gone a full year without cratering my OS or upgrading, so I've never run the full year out. A friend just did. I'm not sure what she did. I think she ponied up the ~$4. Small price for the protection.
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