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Term life insurance is the simplest and most affordable type of life insurance – that’s what makes it so popular. As you probably guessed, term life provides coverage for a specific time period (the term). If you pass away during that term, the insurance company pays a death benefit to your beneficiary. You can have multiple beneficiaries, and leave a percentage of the total death benefit to each of them. But if you live longer than the term, it doesn't pay anything. Pretty simple, right? That's part of what makes it so popular.

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Should I Buy Term Life Insurance?

In almost all cases, term life insurance is the cheapest coverage you’ll find. That makes it ideal for a number of situations.

For example, a term policy works best when there's a big need for coverage, but not much cash to pay for it. Let’s say you’re the breadwinner for a family of four with a limited budget. If you were to pass away, how would your loved ones pay the rent, utilities, and other bills?

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Term life is ideal for these situations because you can buy six figures of insurance protection with a small monthly payment. That way, your loved ones would have the ability to pay those bills and replace some of your income while they adjust to their new situation. No one would need to worry about moving or leaving school. If you want peace of mind for your loved ones, term life is the fastest, easiest way to reach that goal.

Term life also works well if you have limited-term coverage needs. For example, you might want coverage during your working years, but not once you're retired. Or you might only want coverage while you have dependent children at home, or through the duration of your mortgage.

The most popular policies last for 20-30 years. They cover a crucial period in your life when your family depends on your income. Pick a term that covers the length of time you’d be responsible for your kids – until the youngest turns 18, or until the youngest is finished with college. That way, you know your minimum financial obligations to your family are covered.

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The Advantages of a Term Life Insurance Policy

The single biggest advantage is affordability. Term life is the most efficient way to get maximum life insurance protection for the least amount of money. When you're young and just starting out, you know you need insurance, but you probably don't have much spare cash to pay for it. With a term policy, you can buy a greater amount of coverage for less cash than you could with any other type of life insurance.

Term life is also flexible. You can buy coverage for a range of time periods, to ensure you're not buying coverage you don't need. The most common term periods are 15, 20, or 30 years; some insurance companies even offer a 40-year term. But you can also get short term life insurance for 5 years or 10 years. These are all level term policies, meaning the policy’s price is locked in when you buy it and will never increase during your term. You can also get a 1-year renewable policy; however, these are more expensive because the price will go up each year when you renew.

Here are a few more term life insurance options you may want to look for:

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  • Conversion options. If you think you might want to convert your term policy to a permanent policy later in life, you can usually do so. Your life insurance company will spell out your options in the policy contract. There may be a certain number of years you have to make that decision – up to 10 years after buying your policy, for example. Some insurers will even let you convert your policy without a medical exam. It all depends on your insurer and their rules. If conversion is something you’re thinking about, give me a call before you buy a policy. We can go over your quote results together and I can give you more information about each policy’s conversion options.
  • Return of premium. Some insurers offer a return of premium rider (policy add-on) that will give you your money back if you’re still alive at the end of your term. This costs more than a standard policy, but if you’re concerned about outliving your term, this is one way to remove that worry.
  • Terminal illness rider. Many insurance companies will let you dip into the death benefit if you’re diagnosed with a terminal illness. This rider (add-on) is often free and included with your policy – but not always. Check with your agent to be sure if this is something you want.

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The Disadvantages of a Term Life Insurance Policy

The main disadvantage of term life is that your policy has an end point. What happens if you pay into the policy for 30 years, and pass away on the next day? Your family doesn't get any payment.

There are a couple of workarounds, though. When your coverage period ends, for example, you may have the option to renew the policy on a yearly basis. However, every time you renew the policy for an additional term, your rate goes up because you're older, and age represents more risk to the insurance company. It’s not an ideal solution, but it does keep your coverage active.

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If you’re worried about outliving your term, the best thing to do is buy the longest term you can afford. 40-year terms are a relatively new thing, so it’s possible you can get a longer term than you thought. If your needs change and you decide you want a permanent life insurance policy instead, you can ask your agent about converting your term policy into permanent coverage, or simply replacing it with a new permanent policy. Your agent can help you run the cost breakdown for both options to see which makes more sense.

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Sample Term Life Insurance Rates

Shopping for term life insurance is easy. My quoter will search more than 40 of the best insurance companies to find the policy that's right for you. You can even apply for the policy that fits your needs right here online.

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But before you shop, here are a few price points to give you a ballpark figure.*

  • Male, age 30, non-smoker, Iowa, best health class, $200,000 coverage for 30 years: $16/month
  • Male, age 40, non-smoker, Georgia, preferred health class, $250,000 coverage for 25 years: $29/month
  • Male, age 45, non-smoker, Colorado, standard health class, $150,000 coverage for 20 years: $23/month
  • Male, age 55, non-smoker, Florida, preferred health class, $350,000 coverage for 15 years: $76/month

  • Female, age 30, non-smoker, California, best health class, $300,000 coverage for 30 years: $40.66/month
  • Female, age 40, non-smoker, Ohio, standard health class, $200,000 coverage for 15 years: $26.66/month
  • Female, age 45, non-smoker, Kentucky, preferred health class, $500,000 coverage for 20 years: $44.50/month
  • Female, age 55, non-smoker, New York, preferred health class, $200,000 coverage for 20 years: $21.58/month

➡️ Before you buy term life insurance, be sure you compare quotes from multiple insurance companies. Try a few different term lengths or coverage amounts to make sure you get a premium that fits your budget. Click the button below to compare term life rates now!

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Term Life Insurance: No Medical Exam

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When you apply for a life insurance policy, the insurer pays for you to take a medical exam. The examiner will come to your home or office, measure your height and weight, as well as take blood and urine samples. The insurer needs this information to determine your rate – the price of your coverage. Because life insurance is priced based on your age, sex, health, tobacco use, and lifestyle factors, they need to know more about before they know how much of a risk they’re taking by insuring you. This basic health information helps them evaluate that risk.

But what if you don’t have time? Or what if you’re afraid of needles and would just rather not?

There are more options than ever that don’t require a medical exam. Thanks to the pandemic, life insurance companies had to figure out how to insure people with a contactless process. Now, they can decide what rate to offer you using a combination of databases. They’ll look up things like prescription records and your driving record to get a general idea of how risky you’d be to insure. Based on the information they find, they’ll offer you a rate. Chances are you’ll pay slightly higher premiums than if you took the medical exam, but many of my clients prefer it that way. They’re happy to pay for a faster, more convenient process. It all depends what’s most important to you – speed and convenience, or price.

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*Quoted rates valid as of 4/18/23. Quoted companies include Banner Life Insurance, Cincinnati Life, Corebridge (American General), Haven Life, Lincoln Financial, North American, Pacific Life, Principal, Protective, SBLI, Symetra, Transamerica, American National, and others. Quoted rates do not included any policy fees. The number of underwriting classes and class criteria varies by company. Your actual term life insurance premium can only be determined by a full application and the carrier's underwriting process, which may include some medical testing at their expense. Depending on the carrier, premiums can be paid on an annual, semi-annual, quarterly or monthly basis. Monthly premium rates may be available via EFT (electronic funds transfer). Not all carrier policies are available at all durations for all ages in all states.