After 1 year you can extend your license for another 1 year with discounted price. It's your choice to extend your license or not.
When you extend your license you will get support and free upgrades for the next 1 year.
If you choose not to extend your license, you can still use your latest version without paying.
We think above policy is better than 'free upgrades for 2.x' policy. You can receive updates even if we release next major version in a couple of months and you purchased the license today.