Term Life Insurance
Life insurance providing a death benefit for a fixed period, typically 10–30 years, at lower cost than permanent policies.
What is Term Life?
Term life insurance pays a death benefit to beneficiaries if the insured person dies during the policy's specified term — typically 10, 20, or 30 years. It provides the maximum death benefit per premium dollar and is the most straightforward form of life insurance. If the insured survives the term, coverage expires with no payout (unless renewed or converted). Term is most appropriate when the need for coverage is time-limited — while children are young, during working years when income replacement matters, or while a mortgage is outstanding. Premiums are based on the insured's age, health, and term length; they increase substantially with age.
Example
A 35-year-old in good health purchases a 20-year, $1 million term life policy for approximately $40–60 per month. The policy covers the years their children are dependent and their mortgage is outstanding. By age 55, the children are grown and the mortgage is paid, so the coverage need has largely expired. A 20-year term costs far less than permanent whole life or universal life insurance providing equivalent coverage.