How Long Should Your Term Life Insurance Last?

In regards to term life insurance policies, you have several options for the length of the coverage term.

Each choice might work better than others depending on your situation.

Today we will briefly cover each available term length for term life insurance and discuss some of the circumstances you may be considering in making your decision.

Hopefully, this information helps you answer the question, how long should my term life insurance last?

1-Year Convertible Term

A convertible life insurance policy means you have the option of converting from term to permanent life insurance at the end of the policy.

If you decide to convert then you won’t have to prove evidence of insurability.

This is a good option for someone who has a short term death benefit need and also for someone new to the realm of life insurance.

A one-year convertible term option proves great for someone that needs some life insurance but isn’t yet ready to fully commit to something like long-term coverage.

This is an affordable option, but it’s not always the utmost in affordability, so make sure you compare this to the other potential term length options prior to selecting this particular option.

A one-year convertible term option could be ideal for anyone who wants life insurance on a limited budget.

It’s also a great option for any parents that take out loans for student loans for their kids. It can cover them during their years at school.

This is not to be confused with funding college expenses using a universal or whole life insurance policy.

One-year convertible terms are often one of the more affordable life insurance choices.

10-Year Term

A 10-year term option might be a good choice for anyone that’s in better financial circumstances in that time period as they might have so much income that life insurance isn’t actually necessary.

I’ve often found that many of my customers who are in their early 20s like this option since it’s priced great, and to be honest, the majority of them aren’t looking past the next hour, much less the next decade.

And they are young so that makes sense. They have a lot to think about in the near future with marriage, a mortgage, having children and the beginning of a long career.

As they age and some of these life events settle down, we can move onto some of the longer terms.

11 – 19 Year Terms

You can write a term life insurance policy for anywhere from 10 – 20 years.

Once we get to around a 15-year term option, we’re getting into the midrange pricing area as well as the middle of the road in terms of life circumstances.

You’ll likely have kids 15 years of age or older, and you’ve likely decreased your debts for a decade and a half if you’ve been paying them down.

This option can prove useful for a growing family or an already sizeable family with 2 or more kids.

20-Year Term

A 20-year term option, in my professional experience, is likely to bring the best of both worlds in terms of coverage length and monthly premiums.

If you’ve got kids, then most of them are either going to have turned 18 or older.

You should definitely have car loans paid off by now, and you might only have a decade left to pay off the mortgage, assuming you have one.

Going from a 10-year term up to a 20-year term is going to involve a significant jump in monthly premiums, which means that a 10-year term policy is a conservative choice when you don’t know which term you should pick.

30-Year Term (Discontinued)

A 30-year term option is no longer offered but used to come in as the most expensive option when comparing term life insurance policies.

Which makes sense because a 30-year term will give you the longest length of coverage, and in time, it’ll even provide you with the most savings since your rate gets locked in for three consecutive decades.

In that time, you should have a mortgage paid off, you’ll see your kids out of the home and well on their way to career success, and so your total expenses are going to be a lot lower.

Your need for a substantial amount of life insurance isn’t likely to be the same as it once was when you had more financial obligations.

Over to you

Now that you’ve read about the different term lengths for life insurance policies, you should have a better idea of which term life policy is right for you.

Take into account each of the factors we discussed above and depending on where you’re at in life you can determine the best term length for your term life insurance.

Term life insurance isn’t for everyone, which is why there are other types of life insurance policies too.

As always, it is best to speak with a professionally licensed life insurance advisor who can help understand your needs and guide you through the process of comparing term life insurance options.

If you have any questions, please leave a comment below, contact mus, or start a chat with our assistant.