Term life insurance offers affordable coverage for 10 to 30 years. If you die during the term, your beneficiaries receive a tax-free payout.
Find out if you're overpaying for life insurance below.
Updated: July 11, 2025
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The best term life insurance coverage amount is based on financial obligations like mortgages, college costs or income replacement during the coverage period.
Premiums for term life insurance are usually much lower than for permanent policies because you're only paying for coverage over a set period. It doesn’t include cash value or lifelong guarantees, which keeps the cost down.
Most policies can be converted to permanent coverage before the term ends, often without a new medical exam. This allows you to extend coverage for life if your needs change.
Ensure you're getting the best rate for your life insurance. Compare quotes from the top insurance companies.
Term life insurance is a type of life insurance that provides coverage for a set period, usually 10, 20 or 30 years. If you pass away during the term, your family receives a tax-free payout.
Once the term ends, the policyholder can renew it, convert it to permanent coverage, or let it expire. This coverage is popular because it's simple and affordable.
It's used to provide temporary protection during high-need years, such as while paying off a mortgage or supporting children through school.
Term life insurance starts with selecting your desired coverage amount and term length: typically, 10, 20, or 30 years. To apply, you'll fill out a health and lifestyle questionnaire and may need to take a medical exam.
If approved, you'll pay regular premiums to keep the policy active. If you die during the term, your beneficiaries receive a tax-free death benefit. This payout can help cover major expenses like a mortgage, college tuition or daily living costs your family might face without your income.
When the term ends, coverage stops, but you have options.
You can:
This flexibility makes term life a practical choice for people with time-bound financial responsibilities.
Here's how this works in real life: Take Jane, a 35-year-old professional who purchases a $500,000 term life insurance policy with a 20-year term. She pays a $30 monthly premium based on her age and health at the time of purchase.
If Jane passes away during the 20-year term, her beneficiaries would receive the full $500,000 payout, enough to help cover major expenses like mortgages or college tuition. If she outlives the term, the coverage ends, and no payout is made.
While she could renew the policy, her new premiums at age 55 would be much higher, and any new health issues could make renewal harder. This scenario highlights how term life insurance provides temporary financial protection when your family may need it most.
Term life insurance is one of the most affordable ways to get coverage. For example, a healthy 40-year-old male can expect to pay as little as $18 per month for a 10-year, $250,000 policy or around $83 per month for a 20-year, $1 million policy. Your exact premium depends on your age, coverage amount, term length and health. In general, the younger and healthier you are, the less you'll pay.
We gathered sample quotes to show how much term life insurance might cost based on common term lengths and coverage amounts. These estimates assume excellent health and non-smoking status.
| 30-Year-Old | $14 | $20 | $35 |
| 40-Year-Old | $18 | $29 | $53 |
| 50-Year-Old | $37 | $65 | $117 |
| 60-Year-Old | $76 | $141 | $271 |
| 70-Year-Old | $204 | $410 | $719 |
| 30-Year-Old | $17 | $28 | $50 |
| 40-Year-Old | $26 | $44 | $83 |
| 50-Year-Old | $58 | $106 | $203 |
| 60-Year-Old | $150 | $286 | $556 |
| 70-Year-Old | $752 | $1,481 | $2,988 |
Your health and lifestyle are major factors in how much you'll pay for term life insurance. One of the biggest rate drivers is smoking, which increases the risk of serious conditions like heart disease and cancer, leading to much higher premiums.
The table below shows the average monthly cost of a $250,000 term policy for smokers:
| 10-Year Term | $41 |
| 20-Year Term | $57 |
*Rates are for 40-year-olds who smoke.
Your health has a direct impact on how much you’ll pay for term life insurance. If you're in poor health, insurers consider you a higher risk, which means higher monthly premiums.
Below is a table showing the average monthly cost of a $250,000 term life insurance policy for an applicant in poor health:
| 10-Year Term | $20 |
| 20-Year Term | $28 |
*Rates are for 40-year-olds with poor health.
Term life insurance is generally much more affordable than whole life insurance. That's because term coverage lasts for a set number of years, while whole life provides lifelong protection and includes a cash value component, which makes it more expensive.
Choosing between term and whole life depends on your financial goals, budget and how long you need coverage. For many people, term life offers a cost-effective way to get meaningful protection during high-need years.
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Rates updated:
Jul 18, 2025
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Term life insurance offers simple, affordable protection, but it isn't the right fit for every situation. Understanding the key advantages and limitations can help you decide whether this type of policy matches your financial goals and coverage needs.
Considering the benefits of term insurance, along with its limitations, can help you determine if it’s the right choice for your financial plan. While term life insurance offers affordable, straightforward coverage, it’s important to remember that it lacks cash value and may have age restrictions.
Considering the benefits of term insurance, along with its limitations, can help you determine if it's the right choice for your financial plan. While term life insurance offers affordable, straightforward coverage, it lacks cash value and may have age restrictions.
Term life is cheapest when you're young and healthy, making it the perfect time to lock in coverage. A term policy can help couples replace income, pay off joint debt and cover future expenses like childcare, tuition or a mortgage.
Business owners may need term coverage to fund buy-sell agreements or cover debts and taxes. You can also purchase key person insurance to protect your company if a critical employee passes away, with the business named as the policy beneficiary.
If your family relies on your income, term life can replace that income if you die unexpectedly. It can help your partner stay home with children, cover daily expenses or fund long-term goals like college tuition.
If you pass away with outstanding debt, such as a mortgage, student loans or credit card, your loved ones may be responsible. Term life provides a safety net. It gives your family the funds to pay off those balances and avoid financial strain.
Even without a paycheck, stay-at-home parents provide enormous economic value. Term life coverage can help the surviving parent afford childcare or household support (or take time off work) if the caregiver passes away.
You don't have to rely on just one policy. Combining or layering multiple life insurance plans can offer better protection and value over time.
Life insurance laddering involves buying several term policies with different lengths to match your changing financial needs. For example, you could combine a 10-year and 20-year policy to cover both short-term expenses (like childcare) and longer-term obligations (like a mortgage).
This approach provides flexible, cost-effective coverage that decreases as your financial responsibilities shrink. You can also combine term and permanent life insurance, giving you affordable coverage now and lifelong protection later.
Managing multiple policies means juggling more premiums and paperwork, so be sure the added complexity fits your budget and planning style.
When comparing term vs. permanent life insurance, understand how their structure, cost and long-term benefits differ. The right choice depends on your budget, financial goals and how long you need coverage to last. Here's how they compare:
Coverage Length | Fixed term, usually 10–30 years | Covers you for life as long as premiums are paid |
Cost | Lower premiums, especially for younger applicants | Higher premiums due to lifelong coverage and added features |
Cash Value | None — pure death benefit only | Includes a cash value component that grows tax-deferred and can be borrowed against |
Flexibility | Simple, fixed premiums and benefit | Some policies (like universal life) allow flexible payments and benefit adjustments |
Purpose | Best for temporary needs like income replacement or mortgage protection | Better for estate planning, lifelong dependents or building tax-deferred savings |
Many term life insurance policies include a conversion option, allowing you to switch to a permanent life insurance policy without taking a medical exam. Your policy will outline whether this feature is available and how long you have to convert.
If your policy doesn't offer a conversion option, or if the window has passed, you'll likely need to apply for a new permanent policy, which may involve medical underwriting.
Term life insurance is available in several types, each tailored to different financial situations, coverage goals and planning strategies:
This is the most common type of term life insurance. Both the premium and death benefit stay the same throughout the policy. It's ideal for those seeking predictable costs during high-responsibility years (such as raising children or paying off a mortgage).
The death benefit declines over time, making this a good fit for people with shrinking financial obligations, like a home loan. It's used to match a mortgage amortization schedule or other debt that lessens over time.
With this type, the death benefit rises over the policy term, typically to offset inflation or increased future expenses. It can be useful for young families anticipating growing financial responsibilities like education or care costs.
Convertible policies allow you to switch to permanent life insurance without a medical exam. It's a flexible option for people who may want lifelong coverage in the future but can't afford permanent insurance now. Converted policies often come with higher premiums.
These policies allow you to renew your coverage at the end of each term without a medical exam, though premiums increase with age. Annual renewable terms are most common, but some insurers offer longer increments.
Commonly offered through employers, group term life provides basic coverage to multiple people under one contract. It's a convenient option for workers seeking low-cost protection, though it often ends when employment does.
This policy refunds all premiums paid if you outlive the term. It appeals to buyers who want coverage but dislike the idea of "losing" money if they don't use the policy, though it comes at a higher upfront cost.
Life insurance riders can expand your term policy's coverage to address specific needs. Think of riders as optional add-ons that enhance your base coverage without requiring a separate policy. Here are the most common riders available:
When evaluating riders, focus on those that address your biggest financial concerns. Start with essential options like accelerated death benefit and waiver of premium, then consider others based on your family's specific needs and budget.
Finding the best term life insurance policies depends on individual circumstances and specific financial needs. No single policy fits all, so consider personal factors when selecting the right coverage.
Estimate the financial support your family would require in your absence. This includes daily living expenses, debts and future obligations like education costs. Understanding these needs will help you determine the coverage amount necessary for your term life insurance policy.
Shop around and compare different term life insurance policies from various insurers. Look for policies that offer the best value considering the coverage, term length, premium costs and the company's financial stability.
Your health and lifestyle affect your insurance rates. A healthier lifestyle can lead to more favorable terms and lower premiums. Be honest about your health to ensure the policy terms reflect your situation.
Some term life insurance policies offer options like renewal or conversion to permanent insurance. Assess the flexibility of each policy to accommodate future changes in your insurance needs.
Check customer reviews and feedback about the insurance company's service and claim settlement performance. A company with positive reviews is likely to provide a smoother experience.
If you have questions about term life insurance, consult with a professional insurance advisor. They can help you navigate the complexities of term life insurance and find a policy that best suits your needs.
Fill out your life insurance application thoroughly and accurately. You'll answer questions about your health, lifestyle, finances and beneficiaries. Any inconsistencies or omissions can delay your approval or affect your rates.
Most term life insurance policies require a medical exam, which the insurance company schedules at no cost to you. The exam will likely include height, weight and vital signs measurements, blood and urine samples, and basic health questions. For larger policies, you may need an EKG or additional tests.
After you complete your application and medical exam, the underwriting process typically takes two to six weeks for standard applications. During this time, the insurance company reviews your application, medical exam results and any additional information they may request.
Several factors can extend this timeline, including incomplete applications, the need for additional medical records from your doctor or if you're applying for a large coverage amount that requires extra review. The underwriter may also order additional tests or request clarification on certain health conditions.
You can expect regular updates from your insurance agent or the company during this process. Once underwriting is complete, you'll receive your final decision and policy terms.
The right amount of term life insurance depends on your financial obligations and how long your dependents will rely on your income. Start by adding up major expenses (like your mortgage, outstanding debts, child care, education costs and ongoing living expenses), then subtract any assets that could help cover those needs.
A common rule of thumb is to buy coverage equal to 10 times your annual income, but this can vary based on your situation. Match your policy's length to the years your family would be most financially vulnerable.
For a more personalized estimate, try our life insurance calculator or consult a financial advisor.
Answer three simple questions to get your recommended coverage amount.
In most cases, you don't receive money back if you outlive your term life insurance policy. These policies provide affordable coverage during the term without any savings or cash value component.
However, some policies include a "return of premium" feature, which refunds all premiums paid at the end of the term if no claim is made. This option generally costs more than simple term insurance.
Term life insurance provides affordable, temporary coverage for a fixed period (usually 10 to 30 years) with a guaranteed death benefit if the insured dies during that time. It's a practical option for people with time-bound financial obligations, like raising children or paying off a mortgage.
Because it lacks a cash value component and ends without a payout if you outlive the term, it's best for those who want cost-effective protection without a long-term commitment. Before choosing a policy, assess how long your loved ones might depend on your income and whether term life aligns with your budget and goals.
Ensure you're getting the best rate for your life insurance. Compare quotes from the top insurance companies.
Buying term life insurance is easier than purchasing other types of life insurance, but you may still have questions throughout the process. Here are the answers to some of the frequently asked questions about term insurance:
A life insurance term is the duration during which the life insurance policy remains active, ranging from 10 to 30 years. The length depends on the policyholder's needs and objectives.
The characteristics of term life insurance include its fixed term length, premium stability during the active term and lack of cash value accumulation. This type of insurance is purely protective, offering a death benefit if the insured dies during the term but no financial return if the term expires while the insured is still living.
Term insurance covers a death benefit to beneficiaries if the insured dies within the policy term. This benefit helps with expenses like debts, funeral costs and family support.
The advantages of term life insurance are its affordability, simplicity and flexibility. It provides substantial coverage for a fraction of the cost of permanent life insurance, making it accessible to a wider range of people.
The clear terms and fixed duration allow policyholders to plan for specific financial responsibilities, such as education costs or mortgage payments.
No, term life insurance doesn't return premiums at the end of the term. However, some policies called "return of premium" term life insurance do offer this feature, where the premiums paid are returned if the insured outlives the term, usually at a higher cost.
Term offers temporary coverage for a set number of years, while whole life provides coverage for the rest of your life. Whole life also accumulates cash value over time and can be surrendered for that amount if you cancel the policy before you die.
However, whole life is more expensive, so term life may be better if you want low-cost coverage. The best option between term and permanent will vary depending on each individual's unique life circumstances.
Term life insurance lasts for a specific duration agreed upon at purchase. Commonly available term life insurance terms are 10, 20 or 30 years, though some companies also offer 40-year term life insurance.
The ending age for term life insurance varies by policy but generally can extend to 80 to 90 years old, depending on the insurer and the specific term length chosen.
No, term life insurance doesn't have a cash value component. It's purely for financial protection, with premiums paying for the death benefit without accumulating cash value.
The main reason for buying term life insurance is to secure affordable, temporary financial protection that matches personal coverage needs. This works well during important financial responsibilities like raising a family or paying off a mortgage.
You can buy term life insurance online or through insurance agents. This offers a convenient way to compare policies, apply and obtain coverage tailored to your specific needs.
A term life insurance payout is often in a lump sum. Upon the insured's death within the policy term, beneficiaries receive the death benefit in full.
Alternatively, beneficiaries may choose structured payments, receiving the term life insurance death benefit in installments over a set period.
No, term life insurance doesn't decrease in value. It offers a fixed death benefit throughout the policy term, with no cash value accumulation.
Term life insurance provides coverage for a set period, typically up to 30 years, and pays out only if the insured dies during the term. Whole life insurance covers the insured's entire lifetime, accruing cash value that you can borrow against.
Basic term life insurance, also known as simple term life insurance, is a straightforward policy that provides life coverage for a specific period without building cash value. This makes it a cost-effective option for many.
Select term insurance is tailored to offer lower premiums for individuals who meet certain health and lifestyle criteria. This makes it a cost-efficient choice for healthier applicants.
Supplemental term life insurance adds extra coverage to an existing life insurance policy, enhancing the financial protection for the insured's beneficiaries. This coverage is primarily offered through employment benefits.
Choosing the right life insurance for seniors involves assessing their financial needs, health status and desired coverage. The policy should match their life stage and financial goals.
Shopping for term life insurance feels overwhelming when you're trying to balance coverage needs with budget constraints. We designed our research to answer the real questions people ask: How much should I expect to pay? Which companies offer the best value? What coverage amount makes sense for my age and health?
Our analysis examined 1,488 quotes from 14 life insurance companies across 50 ZIP codes nationwide to give you accurate, location-specific rate expectations. All company information and rates reflect 2025 data.
We used a standard profile to obtain life insurance quotes:
We modified the profile by age, gender, height, weight, tobacco use, health rating and geographic location to collect a variety of quotes and determine average life insurance costs for several types of customers. We also collected quotes for term life insurance with varying term lengths and coverage amounts.
We identified trends in the dataset and used those patterns to calculate projections and extend the data beyond what was initially collected.
Why This Methodology Works
This research approach addresses the three biggest challenges in shopping for term life insurance: understanding how much you'll actually pay, knowing which companies offer competitive rates for your profile, and choosing coverage that fits your timeline and budget. Our geographic spread ensures the rates you see reflect real market conditions in your area, not just national averages.
About Mandy Sleight
Mandy Sleight is a licensed property, casualty, life and health insurance agent with 20 years of experience in the industry. She has worked for major insurance companies like State Farm and Nationwide, and most recently as the Operations Coordinator for a startup employee benefits company.
Sleight holds a business administration and management degree from the University of Baltimore and a master's in business administration from Southern New Hampshire University. She uses her vast knowledge of insurance and personal finance to create easy-to-understand and engaging content to help readers make smarter choices with their budgets and finances.
