How long should my life insurance coverage last?


Most people need coverage that lasts 20 to 30 years.

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Before buying a term life insurance policy, you have two decisions to make: 

  1. How much coverage do you need? 

  2. How long do you want your policy’s term to last?

You want a term length that is long enough to cover all of your financial obligations, but not so long that you are overpaying for coverage you don't need. If you have kids, you may want to get at least 20 years of coverage. But if you have a mortgage, that number may be 30.

Key Takeaways

  • Your term life insurance policy should last as long as your financial obligations and outstanding debts

  • If you don’t purchase a long enough term length and need to buy more life insurance coverage later on, your premiums could become unaffordable

  • You can always cancel your policy at no additional cost if you purchase too long of a term length

Choosing your life insurance term length

A term life insurance policy’s “term length” is the policy’s duration, or how long it will last until expiring. Once it expires, you no longer have life insurance coverage and your beneficiaries don't get the death benefit if you die. Most term life insurance policies are 10, 20, or 30 years, but many companies offer additional five- or 10-year increments, sometimes up to 35- or 40-year terms.

Your policy's term length should cover all of your financial obligations and outstanding debts. If you have a 20-year mortgage, then you’ll want a 20-year term so those mortgage payments are protected. Likewise, a 30-year term policy will cover you for 30 years. If you die during that time, your beneficiaries will receive a death benefit.

Calculating your coverage length

The optimal term length for your policy depends on the reason you’re buying the policy in the first place. Most people purchase life insurance to protect their family financially in case of an unexpected death.

Some other situations to keep in mind:

If you just had a kid

If you’re a new parent, you need a policy that covers you for the amount of time your children are financially dependent. That can be anywhere from 20 to 30 years if you plan to cover your child past the age of 18 for college or graduate school tuition.

If you’ve just bought a house

New homeowners might want to consider a 30-year term since that’s likely how long your mortgage lasts. Even if you’ve taken out a 20-year mortgage, you may want a cushion in case you refinance and circumstances change.

If you cosigned a loan

Whether it’s a new car with your spouse, a private student loan with your child, or a small business loan with a partner, you’ll need a life insurance policy that outlasts those outstanding debts and doesn’t leave your co-signers in the lurch. 

Calculating your coverage eligibility

Regardless of how much life insurance you need and can afford, your eligibility for your term life insurance policy also comes into play. Life insurance companies want to see evidence of insurability, or justification that you financially qualify for the amount of coverage you’re requesting.

Term length limits are usually reliant on your age; insurers look at how many years you have before you retire and will no longer make an income or have dependents. The older you are, the fewer options you might have, but some life insurance companies still offer older applicants their longest term length. Each life insurance company approaches this differently, so it’s important to talk to an independent life insurance agent about your specific situation.

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Why you should consider a longer term length

Once you evaluate your financial obligations you can determine exactly how long your term life policy should last. In certain situations, it may be worthwhile to have a policy that lasts longer than necessary. 

1. Your life insurance rates are currently lower than they’ll ever be in the future

The cost of life insurance increases 4.5-9% with every year you age and even more as your health changes. New diagnoses, either for you or even your siblings or parents, can increase your rates in the future when applying for a new policy. So if you buy a 20-year policy but need to extend your coverage down the road, you can expect to pay a lot more in your premiums.

Plus, inflation and industry changes mean you can’t predict what rates will be 20 years in the future. The rates for a 50-year-old can be costly enough now, but in 20 years they can become simply unaffordable.

2. Life happens

A shorter term length might make sense today, but many things that could happen in the future. Maybe you’ll have another child, stop working, or need to take care of your aging parents. As these big life events occur, your life insurance needs can change, and often grow.

End-of-life expenses should also be accounted for. Nursing homes average about $8,821 a month for a private room, according to Genworth’s 2020 Cost of Care survey – and the typical funeral can cost your loved ones $8,000 to $10,000. Even if your dependents no longer rely on you, your loved ones could still end up going into debt to cover the costs of your final rites.

Having some cushion coverage beyond your traditional needs can secure your loved one’s financial security, even if they’re not financially reliant on you.

3. If you need to, you can lower your coverage (and how much you pay)

It’s possible that 20 years into a 30-year policy you no longer need your life insurance coverage, and if that does happen you’re not stuck with your policy. At that point, you can lower the policy’s coverage amount, thus lowering your premiums, without going through underwriting again. Or — you can cancel your policy altogether. This is a much cheaper option than reapplying for a new life insurance policy with more expensive rates down the road.

How term length affects cost

The longer your term length, the higher your monthly premiums. Why? Because a longer term makes it more likely that the insurance company will have to pay out the death benefit. 

For example, a 35-year-old female would pay $25.69 for a 20-year, $500,000 policy. But she would pay $37.35 for the same policy for 30 years.

The advantage of buying a policy with a longer term is that if you need more coverage later, you'll have already locked in lower premiums. You don't want to overpay for coverage you can't afford, however, so you should find a term length that fits in your budget. But remember: when your coverage expires, you should still have enough savings and assets to self-insure, especially for end-of-life care.

Getting the right term length is pivotal to protecting the financial security of your family. A policygenius agent can work with you for free to help you get the right amount of coverage.

Frequently asked questions

How long is term life insurance?

A term life insurance policy is typically 10, 20, or 30 years. Some insurers offer longer or shorter term lengths between five and 40 years. 

How long should my term life insurance policy be?

Your term length depends on your longest financial obligations (a mortgage, child-raising costs, or outstanding debt); how much coverage you qualify for based on your age, health and income; and how much you can comfortably afford to spend on monthly premiums. 

What happens if I outlive my term life insurance?

If your term life insurance policy expires, then your beneficiaries will not receive a death benefit when you die. Most people no longer need insurance once the policy expires, but you can shop for a new policy or convert your term life insurance into a whole life insurance policy in some cases.