When buying a term life insurance policy, one of the biggest questions you'll face is how long your life insurance coverage should last. Term lengths can last as little as one year and as long as 40 years, but usually available between 10 years and 30 years, but 20-year and 30-year term life insurance policies are the most popular on the market.
The amount of time you need depends on the financial obligations your family would face in the event of your death.
How long is term life insurance?
For most people, term life insurance is the best option because it’s affordable, and only lasts for as long as you need it. Most life insurance companies offer term lengths of 5, 10, 20, and 30 years, but you can also find shorter and longer terms (see below).
→ Learn more about how life insurance works
What are the most common term length options to choose from?
The most popular term lengths are 20 years and 30 years, since they generally cover the period of time when your family will need the most financial protection, such as while paying off a mortgage or raising children. But your term life insurance policy should only last as long as your financial obligations and outstanding debts.
Here are the most common term lengths, from shortest to longest.
Annual renewable term life: An annual renewable term policy is a one-year life insurance policy with an option to renew once per year. Long-term, these policies are almost always more expensive than traditional term policies because the premiums start off lower, but increase every year. But annual renewable term life can be a good option for someone who’s trying to improve their health or habits to qualify for a more affordable policy.
5-year term life insurance: A five-year term life insurance policy is the shortest term life insurance policy outside of an annual renewable term policy. It can be good for people looking to cover temporary financial obligations like a car or business loan.
10-year term life insurance: A 10-year term life insurance policy is a good option for older individuals who are looking for coverage and flexibility but don’t have the responsibilities of young children or a mortgage they need covered for a longer period of time.
20-year term life insurance: A 20-year term life insurance policy is the most popular term length option, and is great for parents or single income families.
30-year term life insurance: A 30-year term life insurance policy is ideal for people with long term financial obligations like a mortgage or college debt. This is also a popular choice for parents of very young children.
→ Learn more about how to use the life insurance ladder strategy to save money
How term length affects life insurance rates
The longer your term length is, the higher your premium payments will be. 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 non-smoking female would pay less than $26 for a 20-year term life insurance policy with a $500,000 payout. But she would pay around $39 for the same policy lasting 30 years, according to the Policygenius Life Insurance Price Index.
As a licensed sales agent, I would almost always advise clients to apply for a term that would cover them at least through retirement age — as long as they could afford it. A longer term brings more security and options.
Age | Gender | 10-year term life policy | 20-year term life policy | 30-year term life policy |
|---|---|---|---|---|
25 | Female | $16.24 | $21.41 | $31.01 |
Male | $21.08 | $28.21 | $39.55 | |
35 | Female | $18.24 | $26.28 | $39.34 |
Male | $22.26 | $31.92 | $46.76 | |
45 | Female | $34.76 | $49.91 | $80.84 |
Male | $40.72 | $63.84 | $105.58 |
Methodology: Average monthly estimated rates for male and female non-smokers in a Preferred health classification obtaining a $500,000 term life insurance policy. Rates are based on the monthly Policygenius Life Insurance Price Index. Prices in the index are determined by internal actuarial rate tables for life insurance carriers that offer policies through the Policygenius marketplace: Banner Life, Brighthouse, Corebridge Financial, Lincoln Financial, Foresters Financial, Mutual of Omaha, Pacific Life, Protective, Prudential, Symetra, and Transamerica. Illustration valid as of 07/01/2023.
Getting the right term length is key to protecting the financial security of your family. A Policygenius agent can help you choose the right amount of coverage for your needs.
How to choose the right life insurance term length for you
Choose a coverage length that's long enough to account for all of your financial obligations, but not so long that you’ll pay for coverage you don't need.
If you have a 20-year mortgage, then you’ll want at least a 20-year term to cover your mortgage payments. When your coverage expires, you should have enough savings and assets to self-insure, including funds for end-of-life care.
If you have young children, consider how many years you’ll have to support them until they’re financially independent, and the amount of money you’ll need to cover their expenses, including college tuition when they’re older.
For some families, the answer might be a 20-year policy at a minimum. But a 30-year policy could be a good option for parents of young children or new homebuyers, since that's the length of a traditional mortgage.
→ Learn more about what happens if you outlive your term life insurance policy
Calculate your life insurance coverage length
The best term length for your policy depends on the reason you’re buying the policy in the first place. Most people get life insurance to protect their income in case of an unexpected death, making retirement age a good goal for the term length of your policy to cover.
However, there are other considerations when it comes to determining how long your life insurance coverage should last. People often need a policy to protect:
A mortgage: New homeowners should consider a 30-year term since that’s likely how long your mortgage lasts. Even if you’ve taken out a 20-year mortgage, the cushion can help you if you refinance if circumstances change.
Co-signed loans: Whether it’s a private student loan for your child or a small business loan with a partner, your life insurance policy should outlast those debts so that your co-signers can keep up with payments.
Children: If you’re a new parent, you need coverage for as long as your children are financially dependent. That can be anywhere from 20 to 30 years if you plan to support them past the age of 18.
Expenses until retirement age: Your life insurance policy should ideally last until you no longer have any major financial obligations. For many people, this financial independence occurs at the age of retirement, when their children are out of college and their mortgage is paid off.
Policy length limits can also impact how much coverage you get. Older people often can’t get term life insurance coverage beyond age 85. Each life insurance company has its own limits, so ask a life insurance agent about your specific situation.
For many families, term life insurance is the most convenient type of policy due to its flexibility and cost. On the other hand, if you have dependents who’ll require lifelong care or long-term financial obligations, your family might be better off with a type of life insurance that doesn’t expire, such as whole life or universal life insurance.
Permanent life insurance policies are, however, many times more expensive than term.
A licensed life insurance agent at Policygenius can work with you through the application process so you’re getting coverage from the best insurer for your circumstances at the most competitive price and the right term length for you.
→ Read more about how to get life insurance for families
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. But there are a few reasons it may be worthwhile to choose a longer term for your policy.
1. Your term life insurance rates are lower now than they’ll be in the future
Life insurance quotes increase 4.5% to 9% every year you age. New health issues for you, or even for your parents, can mean higher rates when applying for a new policy.
If you buy a 20-year or a 30 year term life policy but still need coverage after it expires, your new premiums will be much higher. Plus, inflation and industry changes mean you can’t predict what term life insurance rates will be in 20 years. The rates for a 50-year-old can be costly enough now, but in 20 years they could be out of your budget.
Locking in affordable premiums now helps ensure that you won’t face a coverage gap later on, at a time when you need coverage, or more coverage, but can’t get it due to cost or other factors.
2. You’ll be ready for the unexpected
A shorter term length might make sense today, but you might need a longer term length in the future, and locking it in now ensures you won’t have a coverage gap. Maybe you’ll have another child, stop working, or need to take care of your aging parents.
Your life insurance needs can change — and often grow — with these life events.
A long-lasting policy can help with end-of-life expenses too. Nursing homes average $9,034 per month for a private room and the typical funeral can cost upward. [1] Even if your loved ones don’t count on your financial support, the extra coverage can alleviate the financial strain of your passing.
3. You can always lower your coverage if you need to.
As a rule of thumb, the amount of life insurance you have should equal about 10 to 15 times your annual salary. A $1 million coverage amount is a good starting point to consider for working people.
If you get an insurance policy in force, over time, your financial situation may change and it may make sense for you to reduce your coverage. If you need to reduce the amount of coverage you have or shorten the term length, this is easy to do and will not cost you anything.
Conversely, if you need to increase the amount of life insurance coverage that you have, it'll be more expensive to add additional coverage because you’ll be older and the insurance company will be taking on more risk.
You’ll also have to go through the application and underwriting process again, so if anything changes in your health, you may get the additional coverage at a less desirable health rating, and ultimately pay more.
If you can, it’s usually best to get a higher amount when you’re younger and healthier, and you can reduce that coverage later on if you need to.
→ Learn more about whether it’s possible to have too much life insurance
Frequently asked questions
What does term length for life insurance mean?
A term life insurance policy’s term length is how long it will last before expiring. If you die during the term, your beneficiaries will receive the death benefit for the policy.
How long is term life insurance?
A term life insurance policy typically lasts 10, 20, or 30 years. Some insurers offer longer or shorter term lengths between five and 40 years.
What happens to term life insurance when it expires?
If your term life insurance policy expires, your coverage ends and your beneficiaries won’t get a death benefit when you die. You can shop for a new policy or convert to permanent life insurance if you still need coverage.
What is a coverage gap?
A coverage gap is when you need life insurance protection, but don’t have enough (or any at all) in place. If you die during a coverage gap, your loved ones will probably be left in a challenging financial situation.
