¹ LIMRA and Life Foundation 2025 Insurance Barometer Study.
² Protective Classic Choice term policy, 30-year guarantee, Preferred Non-Tobacco, $250,000 death benefit. Premiums increase annually after the initial guaranteed premium period.
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You work hard to make sure your loved ones are cared for, but have you considered what would happen to them if you passed away unexpectedly? While it's never easy to think of worst-case scenarios, it is a good idea to be prepared. Term life insurance can provide financial support if something happens to you. Get an overview of term life insurance, including pros and cons, key considerations and how to apply.
Term life insurance provides your loved ones with financial protection for a specific number of years, generally between 10 and 30 years. They'll receive a death benefit if you pass away while the policy is in force. The death benefit is money the insurance company will pay out to beneficiaries upon your death. Beneficiaries can use this money to help pay household bills, a mortgage or outstanding debts.
With term life insurance, you choose the coverage and term length that best protects your financial obligations or lifestyle. In many cases, someone may seek out financial protection with term coverage when they experience a big life change, such as getting married, purchasing a home or having children.
The benefits of term life insurance make it a popular option for people who want straightforward, affordable coverage they can count on to protect their loved ones.
Nearly half (46%) of consumers are concerned that term life insurance is too expensive and about three-quarters overestimate the cost of premiums.1 The reality is that term life insurance is generally considered one of the most affordable types of insurance. For instance, a 30-year-old could buy a 30-year term policy for less than $25 a month.2
When selecting your term insurance policy, you'll be able to choose the frequency of payments, whether monthly, quarterly, semi-annually or annually. For most types of term policies, your premium payments will remain the same, regardless of the term length. Predictable payments are helpful for financial planning, especially for budget-minded individuals or families.
Term life insurance provides a safety net by paying out a death benefit amount to your beneficiary upon your death. The payout can be a lump sum or a series of payments and are generally tax free. Your policy's death benefit can support several term life insurance uses, such as:
Term life insurance has flexible term lengths, generally for 10-, 15-, 20- and 30-year periods. Depending on the insurance company, you may be able to choose more specific coverage lengths, such as one, 5 or even 40 years. Many individuals select a term period to match the length of their biggest or longest financial obligation.
For example, a young couple with a new home may want to consider a 30-year life insurance policy to help cover mortgage payments. A family with children in high school may benefit from a 10-year policy to help pay for college tuition.
Unlike permanent insurance options, term life insurance does not accumulate cash value and, in general, does not refund premiums after the policy expires. If you are living at the time the policy expires, your beneficiaries will not receive a cash payout.
Extending term life insurance past its expiration often means you will pay higher premiums to renew. Additionally, term life insurance may not be a good option for older individuals seeking temporary coverage as premiums will be higher.
You may want to consider term life insurance if you have dependents who rely on you for financial support or if your death would leave a significant financial burden. Term coverage can be helpful for:
Understanding how term life insurance works can help you better determine what coverage will best fit your goals and financial needs. Do you have a new mortgage? Are you on a specific budget? How many people do you financially support? These are all things to consider when choosing the right term life insurance policy for you. Additional considerations include:
Getting life insurance is a straightforward process that can be completed in a few simple steps.
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