Term life insurance
Coverage for a set number of years — commonly ten, fifteen, twenty, or thirty. If the insured passes away during that term, the policy pays the death benefit. If the term ends, the coverage ends.
What it is built for
Term is the simplest form of life insurance and usually the least expensive per dollar of death benefit, because the insurer is covering a defined window rather than a whole life. Premiums on a level term policy stay the same for the term you choose.
At the end of the term, most policies can be renewed at a much higher annual rate or converted to permanent coverage — the conversion rules differ meaningfully between carriers, and they are worth reading before you buy rather than after.
Often a fit when
- There is a mortgage or other debt with a known payoff horizon
- There are children or a spouse who depend on an income
- The goal is the largest death benefit the budget allows
- The need has an end date — a loan paid off, kids grown, retirement reached
What to look at closely
- What happens at the end of the term. Renewal pricing and conversion rights vary widely by carrier.
- The contestability period. Most policies allow the carrier to review the application for the first two years.
- Whether the death benefit is level or decreasing. Some mortgage-oriented products shrink over time.
- Riders. Terminal illness, chronic illness, child riders, and waiver of premium change what a policy does — and what it costs.
Compare with
If this is not quite the right shape for what you are protecting, one of these probably is.
- Final expense — A small permanent policy sized to a funeral rather than to an income. Easier to qualify for with health history, and it does not expire.
- Whole life — Costs more per dollar of death benefit than term, but the premium is fixed for life and the coverage never ends.
- Indexed universal life — Permanent coverage whose cash value tracks an index within a floor and a cap. More moving parts than whole life, and it needs reviewing over time.
- Annuities — Not life insurance — it converts savings into income you cannot outlive. It solves the opposite problem: living a long time rather than dying too soon.
This policy has exclusions, limitations, and terms under which the policy may be continued in force or discontinued. For costs and complete details of the coverage, call or write your insurance agent or the company.
Availability, features, and pricing vary by carrier, product, state, age, and underwriting. The description above is a general summary of a type of coverage, not a description of any particular policy. Ask your agent for the issuing carrier's own materials before you apply.
See what this looks like for your situation.
A licensed agent can price it against your age, state, and health history — and tell you if a different product fits better.