Term life insurance
A set amount of life insurance for a set period, at a lower cost than permanent coverage.
- Level premium
- the same for the whole term
- Paid tax-free
- to the people you name
- Options when it ends
- renew, convert or let it go
Choosing a term
Match the term to the need.
Term life insurance pays a lump sum to the people you name if you die during the term. Most families need the most coverage while there’s a mortgage and children at home, so choose a term that lasts as long as your biggest obligations.
Illustration only. Ages are examples. Common terms are 10, 20 and 30 years, and the right length depends on your situation.
When your term ends
When your term ends
Your premium stays the same for the whole term. When it ends, you have four choices. The right one depends on whether you still need coverage, and on your health.
The premium stays level for the term. If you renew, it goes up at each renewal.
Your term ends: four choices
Still healthy?
Apply for a new policy
If you still need coverage, a new policy usually costs less than renewing. You’ll answer health questions again.
Happens automatically
Renew
No health questions, but the premium goes up. Most valuable if your health means you can’t qualify for a new policy.
Want lifelong coverage?
Convert to permanent
No health questions, as long as you convert before the deadline in your policy.
No longer need it?
Let it end
Coverage stops. There’s no payout and no cash value.
Illustration only, not to scale. Renewal, conversion and age limits vary by policy, so check your own policy’s terms.
How much coverage
What your family would need.
Add up what your family would need if you died, then subtract what’s already there. The difference is the coverage to aim for.
Term or permanent
Coverage for a while, or for life.
| Feature | Term | Permanent |
|---|---|---|
| Cost | Lower to start | Higher |
| How long it lasts | A set term, such as 10, 20 or 30 years | For life |
| Cash value | None | Some types build cash value |
| Usually for | Needs that end, such as the mortgage years or children at home | Needs that last, such as estate planning or final taxes |
Many people combine the two: permanent coverage for needs that last, and term for the years when the need is highest. Permanent life insurance
Your choices
The terms you choose.
A few choices decide how long your coverage lasts, what happens when the term ends and what else it covers. We’ll explain each one for your situation.
Term length
10, 20 or 30 years, or to age 65 or 85. Choose the length that matches your biggest obligations.
Term to 100
Level premiums until age 100, with no cash value. It works like permanent coverage at a lower cost.
Renewal
Most policies renew automatically at the end of the term, without health questions, at a higher premium, up to a maximum age.
Conversion
Change to permanent coverage without health questions, as long as you convert before the deadline in your policy.
Waiver of premium
If you become disabled, the insurer pays your premiums for as long as you meet the policy’s definition of disability.
Riders you can add
Coverage for your children, critical illness coverage, or an extra benefit if death is accidental.
Cost
What affects the price.
Age and sex
Rates rise with age, and insurers price men and women differently.
Smoking
Smokers pay considerably more.
Health and family history
Your own history, and sometimes your family’s, affects the price.
Coverage amount
The larger the benefit, the higher the premium.
Term length
A longer term costs more each year, but the premium stays level for longer.
Occupation and activities
Higher-risk jobs and pastimes can raise the price.
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Term 20Term to Age 85Frequently asked questions
All questionsWhat is term life insurance?
Term life insurance covers you for a set period, such as 10, 20 or 30 years. If you die during that time, it pays a tax-free lump sum to the people you name. It costs less than permanent coverage, and the premium usually stays the same for the whole term.
How do I choose the right term length for my term life insurance?
Choose a term that lasts as long as your biggest obligations, such as the mortgage and the years until your children are independent. Common terms are 10, 20 or 30 years, or to age 65 or 85. We can help you match the term to your situation.
Can I renew my term life insurance policy when the term ends?
Yes. Most term policies renew automatically at the end of the term, without health questions, up to a maximum age set in the policy. The premium goes up at each renewal, based on your age at the time. If you’re still healthy, a new policy usually costs less than renewing, though you’ll answer health questions again.
What happens if I outlive my term life insurance policy?
When your term ends, you have four choices. You can apply for a new policy, which usually costs less than renewing if you’re still healthy. You can renew, without health questions but at a higher premium. You can convert to permanent coverage without health questions, before the deadline in your policy. Or you can let it end: coverage stops, and there’s no payout and no cash value.
Is term life insurance more affordable than permanent life insurance?
Yes, to start with. For the same coverage, term costs much less than permanent, because it covers a set period and builds no cash value. If you need coverage for life, though, renewing term into your later years gets expensive, because each renewal is priced at your age then. Many people combine the two: permanent coverage for needs that last, and term for the years when the need is highest.
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Related to term life insurance
- Permanent life insurance Coverage for life, with options that build cash value.
- Participating life insurance Permanent coverage that can earn dividends and build cash value.
- Universal life insurance Permanent coverage with a tax-advantaged account you invest.
- Business-owned life insurance Life insurance owned by your company, for protection and planning.
A question about your coverage? Ask us.
No obligation. We’ll tell you plainly what we think, including when you already have what you need.