How long should my term life insurance coverage last?

How long your life insurance lasts depends on your financial needs. Most people need term life coverage that lasts 20 to 30 years.

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Amanda Shih

Amanda Shih

Editor & Licensed Life Insurance Expert

Amanda Shih is a licensed life, disability, and health insurance expert and a former editor at Policygenius, where she covered life insurance and disability insurance. Her expertise has appeared in Slate, Lifehacker, Little Spoon, and J.D. Power.

&Meredith Hoffman

Meredith Hoffman

Senior Editor, Life Insurance

Meredith Hoffman is a senior editor at Policygenius, where she covers life insurance. Previously, she was a news and advice reporter for Bankrate, CreditCards.com, and To Her Credit, where she covered personal finance and gender-based financial discrimination.

Edited byAntonio Ruiz-Camacho

Antonio Ruiz-Camacho

Associate Content Director

Antonio helps lead our life insurance and disability insurance editorial team at Policygenius. Previously, he was a senior director of content at Bankrate and CreditCards.com, as well as a principal writer covering personal finance at CNET.

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Kristi Sullivan, CFP®

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Kristi Sullivan, CFP®, is a certified financial planner and a member of the Financial Review Council at Policygenius. Previously, she was a regional consultant at Fidelity Investments for nine years.

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When buying a term life insurance policy, you need to consider how much coverage you need and how long that coverage should last to provide your loved ones with all the financial protection they need. Term life insurance is the most popular option for most people because it’s affordable, comes with few tax restrictions or limitations, and only lasts for as long as you need it.

Term length is the amount of time a policy lasts, which can usually range from 10 years to 40 years. It will depend on the duration and amount of the financial obligations your family would have to face if you were to die.

How long is term life insurance?

Term life insurance policies can last as little as a year and as long as 40 years, but 20- or 30-year term life insurance policies are the most popular on the market. 

Other options to choose from are five-year and 10-year term life insurance policies. Some companies offer additional five- or 10-year increments, up to 35 or 40 years. 

→ Learn more about how term life insurance works

Which life insurance term length should you choose?

Your term life insurance policy should last as long as your financial obligations and outstanding debts. These are the most common term length options to choose from, listed from shortest to longest term lengths.

  • Annual renewable term life: An annual renewable term policy is a one-year life insurance policy with an option to renew once per year. These policies are almost always more expensive than longer term policies, but 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 to choose the right life insurance term length for you

Choose a coverage length that is 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 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, as this is the length of a traditional mortgage.

→ Learn more about what happens if you outlive your life insurance

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 family financially in case of an unexpected death. People often need a policy to cover:

  • 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 may be restricted to 10- or 20-year terms, especially once they reach their 60s and 70s. 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. But if you have dependents who'll require lifelong care or long-term financial obligations, you might want to consider a type of life insurance that doesn't expire instead, like whole 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

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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. But there are reasons it may be worthwhile to have a policy that lasts longer than necessary. 

1. Your 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. So if you buy a 20-year 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 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 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 upwards of $7,000. [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.

You could find that 20 years into a 30-year policy, you don’t need your life insurance coverage anymore. At that point you can lower the policy’s coverage amount, thus lowering your premiums, or you can cancel your policy altogether without penalty. 

You may have paid a little more to have the cushion coverage in case you needed it, but it’s better to have the protection. Otherwise, you would have paid much more for a new policy if you had needed the extra coverage.

→ Learn more about whether it’s possible to have too much life insurance

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, $500,000 policy. But she would pay around $39 for the same policy lasting 30 years, according to the Policygenius Life Insurance Price Index.

The advantage of buying a policy with a longer term is that you’ll have locked in affordable premiums if you need the coverage later. You don't want to overpay for coverage you can't afford, however, so find a term length that fits in your budget. 

Getting the right term length is pivotal to protecting the financial security of your family. A Policygenius agent can help you choose the right amount of coverage for your needs.

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 a death benefit.

How long does term life insurance last?

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 without enough life insurance coverage, your loved ones won't have a replacement for any financial support you were giving them.

References

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  1. Genworth

    . "

    Cost of Care Survey

    ." Accessed October 31, 2022.

Authors

Editor & Licensed Life Insurance Expert

Amanda Shih

Editor & Licensed Life Insurance Expert

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Amanda Shih is a licensed life, disability, and health insurance expert and a former editor at Policygenius, where she covered life insurance and disability insurance. Her expertise has appeared in Slate, Lifehacker, Little Spoon, and J.D. Power.

Senior Editor, Life Insurance

Meredith Hoffman

Senior Editor, Life Insurance

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Meredith Hoffman is a senior editor at Policygenius, where she covers life insurance. Previously, she was a news and advice reporter for Bankrate, CreditCards.com, and To Her Credit, where she covered personal finance and gender-based financial discrimination.

Editor

Associate Content Director

Antonio Ruiz-Camacho

Associate Content Director

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Antonio helps lead our life insurance and disability insurance editorial team at Policygenius. Previously, he was a senior director of content at Bankrate and CreditCards.com, as well as a principal writer covering personal finance at CNET.

Expert reviewer

Certified Financial Planner

Kristi Sullivan, CFP®

Certified Financial Planner

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Kristi Sullivan, CFP®, is a certified financial planner and a member of the Financial Review Council at Policygenius. Previously, she was a regional consultant at Fidelity Investments for nine years.

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