How Term Life Insurance Works

Term life insurance provides you with temporary life insurance for a specific number of years. You can choose coverage for a "term" of 10, 15, 20 or 30 years.

Term life builds no cash value inside the policy, it is not an investment, it is "pure protection". That’s why it usually costs 2 to 3 times less than permanent life insurance.

  • Term life is the lowest cost type of life insurance.
  • Term life insurance lasts for a set period of time up to 30 years.
  • Term life policies pay the beneficiary the face amount of the term life policy if the insured person dies during the term of the policy. 
  • For example, a 10-year term life policy with a face amount of $250,000 would pay $250,000 to your beneficiary if you die any time during those 10 years. 
  • If you're alive at the end of the policy term, the coverage ends. 

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Term Life Insurance Has Three Standard Features:

  1. Level
    The annual insurance premium for your life insurance policy stays the same each year. The face amount of life insurance coverage also stays the same. Level term life insurance policies can last up to 30 years.

  2. Convertible
    Before the end of the term for your policy, the life insurance policy owner (you) may be able to convert the term life insurance policy into a permanent life insurance policy. The owner usually has a specific number of years during the term life insurance policy to convert the policy. Your life insurance premiums will be higher for the permanent life insurance.

  3. Renewable
    Term life insurance policies that are renewable offer the owner of the policy the option of renewing the life insurance policy at the end of the term, up to a specific age limit (usually age 65 or 70).

    For example, a 15 year policy may be renewed for another 15 years when the first policy ends. If the policy is renewed, a medical exam may or may not be required. The term life insurance premium will usually increase when the policy is renewed.


Term Life Insurance Quotes

Top Pick – JRC Insurance Group

JRC Insurance Group helps you shop, compare and save on life insurance. Regardless of your age or health background, we'll shop our 40+ insurance companies and find you affordable life insurance you need to protect your family and fit your budget. Compare the best life insurance rates for savings up to 73%. Get Your FREE Quote


Highly Recommended – Haven Life

  • Get up to $1,000,000 of affordable term life insurance today.
  • Apply online in under 20 minutes, start coverage today
  • Backed by MassMutual, rated A++ by AM Best

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Haven Life uses the information provided in your application to make an instant decision on your application. Healthy, qualified applicants (based on the information provided in your life insurance application) can be insured immediately with no medical exam while other applicants can receive immediate coverage pending a medical exam.

 


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