The short answer
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 life insurance pros and cons.
The term is the part of a life policy people think about least, yet it matters as much as the amount. Too short, and coverage ends while your family still needs it. Too long, and you pay for years you may not need.
Here is how to choose between 20 and 30 year term life insurance.
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.
MarketView Agency is an independent insurance agency (National Producer Number 18345705).
On this page
- Life insurance pros and cons: common questions
- Mistakes to avoid
- Life insurance coverage amounts: how much life insurance do you need?
- How long should your term be?
- What is a term life ladder?
- What happens when term life expires?
- Add-ons (riders) that can help
- What if you miss a payment?
- Who term life insurance is for
- Frequently asked questions
Life insurance pros and cons: common questions
The short version:
What is the best life insurance for ?
There's no single best policy. The right one depends on how much coverage you need, for how long, your budget and which carrier's underwriting fits your situation best.
Mistakes to avoid
- Canceling coverage before new coverage is approved.
- Buying more than the budget can keep paying.
- Comparing only one carrier.
Compare rates from several carriers in about two minutes. Free, no obligation.
Life insurance coverage amounts: how much 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?
Needs shrink over time. A ladder lets your coverage shrink with them. Each policy is separate, with its own term and premium, and each one simply ends on schedule.
The trade-off is a little more paperwork. Many families find that worth it for the savings.
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.
What happens when term life expires?
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.
Add-ons (riders) that can help
Riders let you shape a policy around your situation. Here are the ones people ask about most. Not every carrier offers each one, and terms differ.
Living benefits
Accelerated benefit riders can pay part of the death benefit early after a qualifying terminal, chronic or critical illness. Many carriers include a terminal illness rider at no added cost.
Waiver of premium
If a covered disability keeps you from working, this rider can keep the policy going without premium payments for as long as the disability lasts, subject to the policy terms.
Return of premium
Pays back the premiums you paid if you outlive the term. It raises the cost, so compare it with a plain term policy before deciding.
Child and spouse riders
Add modest coverage for family members to your own policy. They are convenient, but a separate policy for a spouse is often more flexible.
What if you miss a payment?
Life insurance only works if it is in force when it is needed. Premiums can usually be paid monthly, quarterly or yearly. Paying yearly can cost a little less overall.
If you miss a payment, most policies have a grace period, often about a month, when coverage continues. After that the policy can lapse. Some policies can be reinstated within a set time, but the insurer may ask new health questions.
Tip: Automatic payments from a checking account are the simplest way to avoid a lapse.
Who term life insurance is for
Often a good fit
- you have a need with an end date and want the most coverage for the money.
- you want to cover a mortgage, income or debts.
Maybe not the right fit
- you want coverage that never expires.
- you want a policy that builds cash value.
