The short answer
Non medical life insurance isn't a separate product. It's a term life policy, and for you the difference is mainly how carriers review the application and set the rate. Rules vary by carrier, so comparing several through an independent agent is the simplest way to find a good fit.
This guide answers the most common questions about how to buy non medical life insurance.
20 vs 30 year term life insurance is a common choice, and both can be right. The best term lasts as long as the need it protects: the mortgage, raising children, or income until retirement.
This guide compares common term lengths and explains when two shorter policies make more sense than one long one.
Part of our complete guide: Term Life Insurance: The Complete Guide.
Quick answer
Pick the term that covers your longest important need. Longer terms cost more per year but lock in today's age. Two policies with different terms can cost less than one.
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How to apply
- Decide how much coverage you want and for how long.
- Compare several carriers with an independent agent; underwriting rules differ more than most people expect.
- Answer every application question honestly and completely.
- Review the policy when it arrives. Every state gives you a free-look period to cancel for a refund.
Getting your application ready
- Decide the purpose and amount.
- List medications and doctors.
- Compare several carriers.
Compare rates from several carriers in about two minutes. Free, no obligation.
How much non medical life insurance do you need?
Add up debts, the mortgage, the years of income your family would need and future costs like school, then subtract savings and any coverage you already have.
It's fine to start smaller and add coverage later if your budget changes, as long as your health still qualifies.
How long should your term be?
Choose a term that lasts as long as the need it protects. A few common matches:
| Need | Typical term |
|---|---|
| Young children at home | 20 to 30 years, until they're on their own |
| 30-year mortgage | 30 years |
| Mortgage with fewer years left | A term that covers the remaining years |
| Business loan or short-term debt | 10 to 15 years |
| Income until retirement | The years until you plan to retire |
Longer terms cost more per year because the insurer covers you into older ages. Even so, many people prefer one longer term to buying again later at an older age.
What is a term life ladder?
Laddering means buying two or more term policies with different lengths instead of one large policy. For example, a 30-year policy for the mortgage and a 20-year policy for raising children.
Your total coverage is highest when your family needs it most, then steps down as debts shrink and children grow up. That can cost less over time than one big policy for the longest term.
Tip: Laddering works best when each policy has a clear job. Write down what each one is for.
How to get covered in 3 steps
- Check your rate. Pick your state and answer a few quick questions about the coverage you want.
- Compare carriers. A licensed agent compares term life insurance options from several insurers and explains the trade-offs.
- Apply and get covered. Many applications take one phone call. Coverage starts once the policy is issued and the first premium is paid.
When the term ends
When the term ends, the coverage stops. You will not get your premiums back unless you bought a return of premium policy. Most policies give you options before then.
- Convert to permanent coverage, if the policy allows.
- Renew year to year, usually at a much higher price that rises each year.
- Buy a new policy, if your health and needs justify it.
- Let it end, if the need is gone.
How life insurance is taxed
In most cases, your beneficiaries receive the death benefit generally income-tax-free. They file a claim, the insurer pays, and the money is theirs to use for the mortgage, bills or anything else.
- Interest can be taxable. If the benefit is paid in installments, the interest portion may be taxed.
- Estate tax is separate. A policy you own can count toward your estate. Most families never reach the federal estate tax limit, but large estates should plan ahead.
- Ownership matters. Who owns the policy, who is insured and who is the beneficiary can change the tax result. Three different people in those roles deserves a closer look.
This is general information, not tax advice. A tax professional can look at your exact situation.
Do you need a medical exam?
Many carriers now offer policies that can be approved without a medical exam. Instead of needles and a nurse visit, the insurer uses your answers, prescription history and other records.
- Faster. Decisions can come in days, sometimes the same day.
- Easier. No appointment and no lab work.
- Trade-offs. No-exam policies may cap the coverage amount, and some cost more than fully underwritten policies for healthy people.
Whether you qualify for a no-exam decision depends on your age, health history and the amount you want. Some applicants are moved to an exam partway through. An agent can tell you which carriers are likely to approve you without one.
Is term life right for you?
Often a good fit
- Parents with children at home. Homeowners with a mortgage. Anyone whose income supports others. People who want a lot of coverage at a lower price.
Maybe not the right fit
- People who need coverage for life, such as for final costs or estate planning. People who want cash value they can use later. In those cases, permanent coverage may fit better.