Term Life Insurance

Term life insurance is a type of life insurance that provides coverage for a set period - usually 10, 20, or 30 years. If the insured person dies during that term, the policy pays a tax-free death benefit to their beneficiaries.

Once the term ends, the policyholder can renew it, convert it to permanent coverage, or let it expire. This coverage is popular because it's simple and affordable.

It's often used to provide temporary protection during high-need years - such as while paying off a mortgage or supporting children through school.

Term life insurance starts with selecting your desired coverage amount and term length: typically 10, 20, or 30 years. To apply, you'll fill out a health and lifestyle questionnaire and may need to take a medical exam.

If approved, you'll pay regular premiums to keep the policy active. If you die during the term, your beneficiaries receive a tax-free death benefit. This payout can help cover major expenses like a mortgage, college tuition or daily living costs your family might face without your income. When the term ends, coverage stops, but you have options.

You can:

• Renew the policy (usually at a higher cost),
• Convert it to a permanent life insurance policy, or
• Let it expire if coverage is no longer needed.

This flexibility makes term life a practical choice for people with time-bound financial responsibilities.

Term life insurance is one of the most affordable ways to get coverage. For example, a healthy 40-year-old can expect to pay as little as $23 per month for a 10-year, $250,000 policy or around $83 per month for a 20-year, $1 million policy. Your exact premium depends on your age, coverage amount, term length and health. In general, the younger and healthier you are, the less you'll pay.

We gathered sample quotes to show how much term life insurance might cost based on common term lengths and coverage amounts. These estimates assume excellent health and non-smoking status.

Term life insurance offers simple, affordable protection, but it's not the right fit for every situation. Understanding the key advantages and limitations can help you decide whether this type of policy matches your financial goals and coverage needs.

Considering the benefits of term insurance, along with its limitations, can help you determine if it’s the right choice for your financial plan. While term life insurance offers affordable, straightforward coverage, it’s important to remember that it lacks cash value and may have age restrictions.

Considering the benefits of term insurance, along with its limitations, can help you determine if it's the right choice for your financial plan. While term life insurance offers affordable, straightforward coverage, it lacks cash value and may have age restrictions.

When comparing term vs. permanent life insurance, understand how their structure, cost and long-term benefits differ. The right choice depends on your budget, financial goals and how long you need coverage to last. Here's how they compare:

Many term life insurance policies include a conversion option, allowing you to switch to a permanent life insurance policy without taking a medical exam. Your policy will outline whether this feature is available and how long you have to convert.

If your policy doesn't offer a conversion option, or if the window has passed, you'll likely need to apply for a new permanent policy, which typically involves medical underwriting.

Term life insurance is available in several types, each tailored to different financial situations, coverage goals and planning strategies:

Finding the best term life insurance policies often depends on individual circumstances and specific financial needs. No single policy fits all, so consider personal factors when selecting the right coverage.

The right amount of term life insurance depends on your financial obligations and how long your dependents will rely on your income. Start by adding up major expenses (like your mortgage, outstanding debts, child care, education costs and ongoing living expenses), then subtract any assets that could help cover those needs.

A common rule of thumb is to buy coverage equal to 10 times your annual income, but this can vary based on your situation. Match your policy's length to the years your family would be most financially vulnerable.

For a more personalized estimate, try our life insurance calculator or consult a financial advisor.

Your health and lifestyle are major factors in how much you'll pay for term life insurance. One of the biggest rate drivers is smoking, which increases the risk of serious conditions like heart disease and cancer, leading to much higher premiums.

The table below shows the average monthly cost of a $250,000 term policy for female smokers:

Your health has a direct impact on how much you’ll pay for term life insurance. If you're in poor health, insurers consider you a higher risk, which means higher monthly premiums.

Below is a table showing the average monthly cost of a $250,000 term life insurance policy for a female applicant in poor health:

Term life insurance is generally much more affordable than whole life insurance. That's because term coverage lasts for a set number of years, while whole life provides lifelong protection and includes a cash value component, which makes it more expensive.

Choosing between term and whole life depends on your financial goals, budget and how long you need coverage. For many people, term life offers a cost-effective way to get meaningful protection during high-need years.

Take Jane, a 35-year-old professional who purchases a $500,000 term life insurance policy with a 20-year term. She pays a $30 monthly premium based on her age and health at the time of purchase.

If Jane passes away during the 20-year term, her beneficiaries would receive the full $500,000 payout, enough to help cover major expenses like a mortgage or college tuition. If she outlives the term, the coverage ends and no payout is made.

While she could renew the policy, her new premiums at age 55 would be much higher, and any new health issues could make renewal harder. This scenario highlights how term life insurance provides temporary financial protection when your family may need it most.

Term life insurance provides affordable, temporary coverage for a fixed period (usually 10 to 30 years) with a guaranteed death benefit if the insured dies during that time. It's a practical option for people with time-bound financial obligations, like raising children or paying off a mortgage.

Because it lacks a cash value component and ends without a payout if you outlive the term, it's best for those who want cost-effective protection without a long-term commitment. Before choosing a policy, assess how long your loved ones might depend on your income and whether term life aligns with your budget and goals.

Buying term life insurance is often easier than purchasing other types of life insurance, but you may still have questions throughout the process. Here are the answers to some of the most common concerns about term insurance.

Why Trust MoneyGeek? To calculate average costs for term life insurance, MoneyGeek analyzed 1,488 quotes from 14 different life insurance companies across 50 ZIP codes in the U.S. All rates and company information are current as of 2025.

We used a standard profile to obtain life insurance quotes:

• 40-year-old male
• Nonsmoker
• 5 feet 11 inches tall and 175 pounds
• Excellent health rating

We modified the profile by age, gender, height, weight, tobacco use, health rating and geographic location to collect a variety of quotes and determine average life insurance costs for several types of customers. We also collected quotes for term life insurance with varying term lengths and coverage amounts.

We identified trends in the data set and used those patterns to calculate projections and extend the data beyond what was initially collected.