Term life insurance is an affordable way to provide financial protection for your loved ones when it’s needed most. A term policy lasts for a set number of years, usually 10 to 30, and pays out if you die during that time period.
Last updated: May 23, 2024 Compare quotes in less than 5 minutes
Written by Leslie Kasperowicz
Executive EditorLeslie Kasperowicz is an insurance expert with four years of direct agency experience and over a decade of creating educational content to help insurance shoppers make confident, informed decisions.
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Term life insurance policies last a predetermined number of years, most commonly between 10 and 30. Knowing how much coverage you need and for how long are important factors in choosing the right term life policy.
Because term life insurance costs less, you can get more coverage for your money. Term life is meant to be in place when you need it most, such as when you have young children and a big mortgage.
Below, we’ll discuss how to find the best term life insurance policy for your needs and get the best rates on term life insurance policies by comparing companies.
When purchasing term life insurance, consider the following factors to ensure you get the right coverage for your needs.
Term life insurance pays your beneficiary a guaranteed death benefit amount if you die during the term. Terms are usually between 10 and 30 years, but some companies may offer shorter or longer term options.
Because of the limits of the term, life insurance companies charge lower rates for term life than they do for a permanent policy like whole life insurance or universal life insurance. The risk of dying during the set term is lower than with a permanent policy. The shorter the term, the lower the risk.
There are several variations of term life insurance, all with slightly different underwriting or coverage features.
In addition, a term life insurance policy may be either fully underwritten (you undergo a medical exam) or simplified issue, also known as no medical exam term life. No medical exam options generally cost more, as the insurance company is taking the risk that you have no serious conditions.
The average term life insurance cost is $528 a year for a 30-year-old male non-smoker with a death benefit of $250,000 and a 30-year policy term.
It’s generally more affordable than people think.
"Consistently, consumers have told our researchers they believe they can't afford life insurance, but when we dug deeper, our research showed that many overestimate the cost by as much as 300%," says Robert Kerzner, LIMRA's president and chief executive officer.
Many factors go into the cost of term life insurance, including age, gender and health status. Here are the average annual premiums for term life death benefits of $250,000 for people classified as "regular" health.
| Health profile and term length | Age 30 | Age 40 | Age 50 | Age 60 |
|---|---|---|---|---|
| Female non-smoker 10-year term | $223 | $306 | $573 | $1,184 |
| Female non-smoker 20-year term | $314 | $477 | $955 | $2,310 |
| Female non-smoker 30-year term | $431 | $695 | $1,537 | $7,300* |
| Female smoker 10-year term | $439 | $692 | $1,482 | $3,072 |
| Female smoker 20-year term | $669 | $1,185 | $2,386 | $5,219 |
| Female smoker 30-year term | $915 | $1,655 | $3,695 | $13,030* |
| Male non-smoker 10-year term | $263 | $358 | $735 | $1,716 |
| Male non-smoker 20-year term | $368 | $565 | $1,226 | $3,128 |
| Male non-smoker 30-year term | $528 | $874 | $2,023 | $7,300* |
| Male smoker 10-year term | $553 | $866 | $1,970 | $4,424 |
| Male smoker 20-year term | $826 | $1,487 | $3,176 | $7,100 |
| Male smoker 30-year term | $1,166 | $2,140 | $4,470 | $13,030* |
*Limited quotes available. Data source: Compulife Quotation System, 2023.
If you’re trying to decide between term and whole life insurance (or universal life), look at the quick comparison chart below.
| Term | Whole | Universal | |
|---|---|---|---|
| Premiums | Level | Level | Flexible |
| Death benefit | Level/guaranteed | Level/Guaranteed | Flexible |
| Length of coverage | Expires at end of term | Entire life | Entire life |
| Cash value | No | Yes | Yes |
| Medical exam | Sometimes | Sometimes | Yes |
| Cost | Lower | Higher | Higher |
It’s important to note that permanent life insurance, especially universal life, should be discussed with an insurance expert and a financial advisor before you make a purchase to be sure it’s right for you.
Here are some reasons why term life insurance might be a good fit for families on a budget.
Of course, there are pros and cons of term life insurance. For most people, the biggest downside is that the coverage expires, and there is no return on the investment. However, like all insurance, term life insurance is peace of mind for the “what if,” and that’s really what you are paying for.
If you outlive your term policy, the coverage will end, and you will not receive anything back from the insurance company.
Return-of-premium term life is the only exception; however, it’s more expensive than a regular term policy.
The purpose of term life is to provide coverage when it’s most needed and then to expire when you no longer need it. However, if you reach the end of your term and discover that the need is still there, you can convert the policy to a permanent plan.
You will pay higher rates because you are older, but you won’t have to take a new medical exam in most cases.
A medical exam is usually required when applying for a standard term life insurance policy. The exam will check your height, weight, medical history, and smoking habits and include a blood and urine test. These tests will look for specific medical problems.
The results may hinder you from getting approved for insurance, or you may wind up with much higher rates depending on the outcome. If you have health problems, you might want to consider a "no medical exam" term life insurance policy, known as simplified issue life insurance.
These policies require only a few health questions and no medical exam. You will pay a higher premium for a no-exam life insurance policy, so if you are in good health, a traditional policy is your best bet.
Anyone who needs to provide financial protection in the event of their death and needs that coverage for a specific period of time, can look to term life insurance.
Cameron Ellis, an assistant professor in the Department of Risk, Insurance, & Healthcare Management at the Fox School of Business at Temple University, says that getting life insurance as soon as someone else depends on your income is a good idea.
"This could be when you and someone else sign a lease together or purchase a car/home. Or it could be whenever you have children. If one spouse is 'stay at home,' I would still recommend they purchase some life insurance. Even though there is no lost income, replacing the lost childcare and domestic duties can be very expensive," Ellis says.
Term life insurance is the simplest type of life insurance to get and it's become even easier to get approved these days.
"Insurance companies are offering term life insurance products today that speed up the underwriting process and may not include a medical exam for policies within a certain benefit amount and for a person under a specific age, say 50 years old," Carrie Skogsberg of COUNTRY Financial Life Insurance says.
Term life is a good choice for most people, and is more affordable than permanent life.
When deciding how much life insurance you need, think about:
You can use Insurance.com’s life insurance calculator to determine how much coverage you should have. The life insurance calculator considers your funeral costs, mortgage, income, debt and future education to give you a clear estimate of the ideal amount of life insurance coverage.
Term life policies can include extra features or riders for additional coverage.
Here are some common term life riders:
When shopping for the best life insurance company, there are a few steps to follow:
Once you've narrowed down your list of the best term life insurance companies, your next focus should be getting the best rate. Here are five ways to save on life insurance:
Like all life insurance, it’s worth it if you need it. But even if you don’t use it and hope you won’t have to, it brings peace of mind that is well worth the cost.
The monthly cost of term life insurance depends on various factors, including your age, health status, the term's length, and the death benefit amount. Get quotes for your particular situation to find out what your rates will be.
There are no rules regarding how the death benefit can be used. Common uses include:
