How Long Do Term Life Insurance Plans Last?
Term life insurance is a type of "temporary" insurance providing life insurance protection for a set number of years.
The term of the insurance policy is the duration, how long your insurance will last.
You select a policy term when comparing your prices for life insurance, so you can find out how much your term policy will cost for the specific duration of life insurance.
Policy Term Options for Coverage
Terms Duration Options: 10, 15, 20, 25, 30, 35 or 40 years.
Most term life plans offer coverage for a period from ten to thirty years.
However, you may be able to select a duration of coverage for up to forty years.
Annual Renewable Term Insurance
Another option available for people seeking temporary life insurance protection is Annual Renewable Term life insurance, which guarantees your ability to buy coverage for a set period of time; however, the policy renews each year at a higher premium.
So, you keep paying more each year for the entire time you need your life insurance to last.
Level Term Life Insurance
You’ll pay less by purchasing a standard Level Term life insurance plan.
Annual renewal term insurance can be a good choice for people who have short-term financial obligations of 4 years or less, or who want to cover a short period until they get a new job with group life coverage.
Keep in mind, if you need coverage lasting for less than 5 years, you can buy a 5-year level term life policy, and cancel the coverage after 4 years, or when you no longer need coverage, for example.
Term to Age 70
In addition, some term policies provide term to 70 coverage which means you have life insurance that will last until you reach age seventy; however, the premiums remain level for the first 20 years you are insured, usually. Then, the premiums increase each year after the initial twenty-year period.
Renewable Term Life Insurance
Also, renewable term life policies allow you the option of renewing coverage for an additional term (usually up to 10 years), when your initial policy term expires.
So, if you decide after purchasing your first term insurance plan that your need for coverage is longer than the original term duration, you may choose to renew your first term life policy when it ends.
Convertible Term Life Insurance
And, if you decide you need lifetime life insurance protection after purchasing your term insurance, you may be able to convert your term life policy into a permanent life insurance policy if you have convertible coverage.
However, you may need to notify your insurance company of your conversion request by a specific date stated within your term life insurance policy contract.
How Long Should Your Term Life Insurance Coverage Last?
Term insurance can last as long you need protection up to 40 years, but most policies provide between 10 and 30 years of insurance. You’ll want to select a policy term that is in line with your family’s specific need for protection.
So, consider what goal you want your life insurance plan to accomplish, providing protection for your mortgage, children’s education, family’s living expenses, replace your income, etc.
Then consider how long you need your life insurance to last in order to accomplish each of your financial goals.
What is the Longest Period of Time Life Insurance is Needed?
Once you know this answer you can select coverage for that duration.
Or, you could have separate term policies with the specific amount of coverage needed and duration of coverage for each of your family’s specific needs.
That way, you pay the lowest overall cost for coverage that is designed to meet all of your specific life insurance needs.
Example of Staggered Term Insurance Policies
Purchasing several different term life policies can allow you to design a life insurance plan to fit your needs and save you money.
For instance, you could have a 25 year $350,000 term life policy to protect your 25-year mortgage loan.
And, a 20 year $120,000 term life policy to provide for your 2-year-old child’s college education.
And, a $325,000 30-year term policy to provide for your spouse’s retirement and your family’s ongoing living expenses.
Why Choose Term Insurance?
The point of buying term life insurance coverage is to make sure you have the protection you need, while you need it, at the most affordable price.
Term insurance is easy-to-understand, offers flexible coverage terms, and offers you the lowest cost life insurance available.
Whether you are on a fixed monthly budget, have a growing family, or increasing financial responsibilities, term insurance can help you provide financial security for the future of your family.
If you’re buying a term life insurance policy, you may be wondering how long of a "Term" (Duration of Coverage) you need.
It’s one of the most important questions to consider when you purchase a term life plan.
The fact is, you are buying life insurance to provide financial security and protection for your loved ones and choosing the right Policy Term (duration) will make sure they have the protection they need, when they need it most.
It’s simple. Just answer the following questions:
Then, look at the longest duration needed to accomplish your longest financial goal for the future, related to your life insurance policy, and select that as your Policy Term.
Example of Goals for Life Insurance to Protect:
NOTE: Make sure you choose the policy "Term" that matches your longest financial obligation.
How Long Does Term Life Insurance Last?
Term life is temporary life insurance lasting for a period of up to 40 years.
You may be able to select a duration of coverage for a period of:
The longest duration available for term insurance is usually 40 years.
So, the maximum duration available would be forty years of life insurance protection if buying a term policy.
When you’re buying term insurance coverage, you have two main decisions:
The duration of the financial obligations you want to cover will help you determine how long your term life policy should last.
You want your policy to continue until your last major financial obligation is paid off.
Term policies are usually sold with term options of 5, 10, 15, 20, 25 or 30 years.
You won’t find, for example, a nine-year life insurance policy.
The longer the length of the term policy, the higher your annual cost of life insurance, because you’re locking in your rate for a longer time, and as you age, health problems may develop and your likelihood of dying increases.
If your longest-lasting financial obligation falls in between available term periods, round up to the longer duration.
For example, if your mortgage will be paid off in 14 years, round up your term life coverage to last for a period of at least fifteen years.
Level Term life insurance provides you with temporary life insurance for a specific number of years. You can choose coverage for a "Term" of between 10 and 40 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 5-10 times less than permanent life insurance.
Term life is the lowest cost type of life insurance.
Term life insurance lasts for a duration of up to 40 years.
You pay the same premium each year for the entire duration of your policy term.
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 15-year term life policy with a face amount of $200,000 would pay $200,000 to your beneficiary if you die any time during those 15 years.
If you're alive at the end of the policy term, the coverage ends.
Duration of Mortgage Loan
Your mortgage is a big part of your monthly living expenses and often the main reason people choose to purchase a life insurance policy.
If you want your life insurance to cover your mortgage loan, consider how many years you have left until your house is paid off. You don’t want your insurance policy to expire after 10 years if your mortgage payments will last for another 10 or 15 years.
How Long Until Your Children are Grown
The cost to raise your Children can be very expensive, considering food, clothing, camps, music lessons, healthcare, education, gifts, phones, vacations, education, computers, and so much more.
How long until you can expect your kids to be able to support themselves?
These days, that’s probably at least a few years beyond age 18, especially if you’re planning to pay for their college education.
How Long Until Retirement
Hopefully, you’ve been saving for the day when you will no longer need to work.
If you’re buying term life insurance primarily for income replacement for your family, you may not need coverage once you have retired.
Once your kids are all grown up, the house is paid off, and you’re living off your retirement savings, life insurance is one more thing you no longer need to worry about – since you probably don’t have the financial obligations you once paid on a monthly basis.
Your policy’s "Term Length" is the policy’s duration – How long you have your life insurance protection "In Force".
You want a term length that covers the entirety of your financial obligations or outstanding debts.
If you have a 25-year mortgage loan on your home, then you’ll want a 25-year level term life policy, so your mortgage payments are protected, if you keep paying the premiums on your life insurance.
Likewise, a 35-year term life policy will cover you for 35 years. If you die during that time, your beneficiaries will receive the death benefit proceeds from your insurance policy.
But if you die after your term length is over and you didn’t get additional coverage or convert your term policy into a permanent policy, your beneficiaries won’t receive any death benefits, because your life insurance will have expired.
Bottom Line: To make sure your loved ones don’t become liable for your financial obligations, choose a term length that covers your longest financial obligation.
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