Term life insurance is generally a budget-friendly option that’s designed to provide death benefit protection for a set period of time.
Term life insurance is a straightforward and affordable type of life insurance that provides financial protection for a set period, or "term"—typically 10, 15, 20, or 30 years. If the policyholder passes away during that time, the policy pays the death benefit to their chosen beneficiaries. However, if the term ends while the policyholder is still living, the coverage simply expires with no payout.
Because term life does not include any investment or savings features, it tends to be significantly more affordable than permanent life insurance options. It's often the best choice for individuals or families looking for high coverage at a lower cost, especially during the years when financial responsibilities—such as mortgages, income replacement, or children's education—are at their peak.
For example, someone might choose a 20-year term policy to ensure their family is protected until the kids are grown and the house is paid off. If they pass away during those 20 years, their family would receive the full death benefit. If they’re still living after that period, the policy ends, and no benefits are paid unless it is renewed or converted.
Some term policies can be renewed annually after the term ends, although at higher premiums. Others may include a conversion option, which allows the policyholder to switch to a permanent policy without undergoing another medical exam.
Term life insurance is a practical, cost-effective way to ensure your loved ones are financially secure if the unexpected happens during your prime earning years.
One of the most common myths about
life insurance is around the cost. 15% of
consumers say they haven’t bought life
insurance because it’s too expensive,
and more than 65% overestimate its
true cost.
For instance, a 30-year-old could buy
a 35-year term policy for less than
$25 a month. That’s about 6 cups of
gourmet coffee.1
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