How term life works
You choose a coverage amount and a term length, commonly 10, 15, 20 or 30 years. With a level term policy the premium stays the same for the whole term. When the term ends you can usually let the policy lapse, renew it year to year at a higher price, or, if the policy allows it, convert it to permanent coverage.
Who term life tends to fit
Term is built for needs that have an end date.
- Replacing income while children are growing up
- Covering a mortgage or other debt until it is paid off
- Protecting a spouse until retirement savings can carry the household
- Covering a business loan or a key person for a fixed period
What affects the price
Insurers price term coverage on age, sex, health history, tobacco use, the coverage amount and the term length. Longer terms and larger amounts cost more. Many policies require a medical exam, although some insurers offer term coverage with health questions only.
Questions to ask an agent
A licensed agent can explain the specifics of any policy they offer. Useful questions include:
- Is the premium guaranteed level for the full term?
- Can I convert to permanent coverage, and until what age?
- Is a medical exam required?
- What riders are available, and what do they cost?
Common questions
What happens when a term policy ends?
Coverage stops unless you renew or convert it. Renewal premiums are usually much higher because they are based on your age at renewal.
Does term life insurance build cash value?
No. Standard term policies provide a death benefit only. Some insurers sell a return-of-premium version at a higher price.
This page is general information, not insurance, legal or tax advice. Policy terms, eligibility and pricing vary by insurer and state. A licensed insurance agent can explain the specific products they offer.