Term Life Insurance: A Complete Guide (2023)
Term life insurance costs $26 monthly, but your rates will vary based on age, gender, and policy length. Most term life policies provide coverage for 15-30 years, and longer terms come with higher rates. Compare term life insurance quotes online to find the most affordable coverage.
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Laura Walker
Former Licensed Agent
Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance for 10 years. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate...
Former Licensed Agent
UPDATED: Aug 14, 2023
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Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different insurance companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about insurance. Our goal is to be an objective, third-party resource for everything insurance related. We update our site regularly, and all content is reviewed by insurance experts.
UPDATED: Aug 14, 2023
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We are not affiliated with any one insurance company and cannot guarantee quotes from any single insurance company.
Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different insurance companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
- Term life insurance is more affordable than whole life insurance
- Most term life policies last between 15, 20, and 30 years
- You will likely need to take a medical exam to determine your term life insurance rates
Welcome to our comprehensive guide on term life insurance. In this article, we delve into examples of term life insurance coverage, providing you with valuable insights and information to help you find an affordable policy.
There are different types of term life insurance, but each will only last for a certain number of years. Most term life policies last between 15, 20, or 30 years, but some companies will provide 40-year policies.
Keep reading to understand the basics of term life insurance, how to determine the right coverage amount, and explore the benefits and advantages to consider when choosing a policy. Whether you’re a first-time buyer or looking to reassess your current coverage, this guide equips you with the knowledge needed to make informed decisions for protecting your loved ones’ future.
What to Consider Before You Buy Term Life Insurance
When getting a term life insurance policy, you should consider the coverage amount and term length that would best meet the financial needs of your beneficiaries in the event of your passing. Any major debts, financial obligations, and future expenses, such as college tuition, will influence how much term life insurance you need.
If you need life insurance coverage for 35 years or more, consider getting quotes for whole, or permanent life insurance. This type of policy is much more expensive but provides coverage that lasts your whole life instead of a set number of years.
The Term Life Insurance Application Process
The time it takes to get term life insurance coverage can vary, but the application process typically involves a medical exam and can take a few weeks to complete. However, some providers offer simplified issue policies that do not require a medical exam and can be approved more quickly.
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Case Studies: Term Life Insurance: A Complete Guide
Case Study 1: John’s Family Protection
John, a 35-year-old married individual with two children, recognized the need for financial security in the event of his unexpected death. He opted for a term life insurance policy to ensure his family’s well-being. John purchased a 20-year term life insurance policy with a coverage amount of $500,000. Unfortunately, John passed away unexpectedly in the fifth year of the policy term. As a result, his family received the full death benefit of $500,000, providing them with financial stability during a challenging time.
Case Study 2: Sarah’s Mortgage Protection
Sarah, a 45-year-old homeowner, had a mortgage that would last for another 15 years. She wanted to secure her family’s home in the event of her untimely demise. Sarah decided to obtain a 15-year term life insurance policy with a coverage amount matching her mortgage balance of $300,000. Tragically, Sarah passed away after nine years. Thanks to her term life insurance policy, the remaining mortgage balance was paid off in full, ensuring her family could continue living in their cherished home.
Case Study 3: Mark’s Education Fund
Mark, a 30-year-old father, wanted to secure his children’s future by providing funds for their education. He opted for a term life insurance policy to create an education fund in case of his premature death. Mark purchased a 25-year term life insurance policy with a coverage amount of $250,000. Unfortunately, Mark passed away unexpectedly in the 18th year of the policy term. The education fund was established using the death benefit, allowing his children to pursue their dreams without financial constraints.
Case Study 4: Susan’s Business Continuity
Susan, a 50-year-old entrepreneur, was the sole proprietor of a successful small business. She recognized the need to protect her business and ensure its continuity in case of her demise. Susan purchased a 10-year term life insurance policy with a coverage amount of $1,000,000, designating her business as the beneficiary. Tragically, Susan passed away in the sixth year of the policy term. The death benefit provided the necessary capital for her business to continue operating smoothly and transition into new leadership.
Case Study 5: Michael’s Debt Repayment
Michael, a 40-year-old individual burdened with substantial debts, wanted to protect his loved ones from inheriting his financial liabilities. He obtained a 15-year term life insurance policy with a coverage amount of $500,000, equal to his outstanding debts. Sadly, Michael passed away in the 10th year of the policy term. The death benefit was used to repay his debts entirely, ensuring that his family did not bear the financial burden he left behind.
How to Get Affordable Term Life Insurance
You can get free term life insurance quotes by entering your ZIP code into our comparison tool below. You will be asked to provide information such as your age, gender, and health history, as well as the desired coverage amount and term length.
It’s in your best interest to get quotes for different types of life insurance from multiple companies to find a policy that fits your lifestyle and your budget.
Frequently Asked Questions
What is term life insurance?
Term life insurance is a type of life insurance policy that provides coverage for a specified period, usually 10, 15, 20, 25, or 30 years. If the policyholder passes away during the term, their beneficiaries receive a lump sum payment.
What is the main disadvantage of term life insurance?
The main disadvantage of term life policies is that coverage does not last your full life, and once the term ends, your loved ones will not receive any benefits.
What happens to term life insurance at the end of the term?
At the end of a term life policy, coverage ends. Beneficiaries will not receive any death benefits, and you will not receive a return on your premiums.
Which is better term or whole life insurance?
Deciding between term life vs. whole life insurance depends on your lifestyle. Permanent policies last your whole life and come with investment opportunities not available with term life. Term life insurance may not last your whole life, but rates are significantly cheaper.
Why do people prefer term life insurance?
Most people prefer term life insurance because it is much more affordable than whole life, and many companies offer the option of renewing the term or converting it to a permanent policy after the term ends.
What are the average term life insurance rates?
The average term life insurance rate is $26 per month, but rates can vary based on factors such as age, health, and the length and amount of coverage.
Can you cash out a term life insurance policy?
You cannot cash out term life policies. Term life insurance provides coverage only and does not offer any sort of cash value benefit. The premiums paid by policyholders are used solely to provide coverage for the financial responsibilities of the insured.
Which are the best term life insurance companies?
According to our guide to the best life insurance companies, Transamerica and Nationwide are the top choice for term life insurance among Generation X and Millennials.
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Laura Walker
Former Licensed Agent
Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance for 10 years. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate...
Former Licensed Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about insurance. Our goal is to be an objective, third-party resource for everything insurance related. We update our site regularly, and all content is reviewed by insurance experts.