How Long Should Your Term Life Insurance Last?

Term life insurance is often an affordable way to protect your family financially in the event of your death. When you’re buying term life insurance, you have two main decisions to make: how much life insurance to buy and how long the coverage should last.

You should choose a term length based on your financial responsibilities, like your mortgage or children’s education. Ideally, you want the policy to continue until your last major obligation is taken care of. So the length of your financial commitments can help determine how long your term life insurance policy should last.

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What does a 'policy term' mean in life insurance?

For life insurance, a policy term is the length of time you are under contract with an insurance company. As long as you pay your premiums, the insurer will pay a death benefit to your beneficiary if you die within that time period.

Term policies typically last for a set period of time.

How long is a term life insurance policy?

Term life insurance policies are generally sold in lengths of 5, 10, 15, 20, 25 or 30 years. (In some cases, you can find 40-year term life insurance.) The longer the policy, the higher your premium is likely to be. That’s because you’re locking in your rate for a longer time, and as you age, health problems tend to crop up and your risk of dying increases.

Another option is annual renewable term life insurance, which can be renewed annually at a higher rate, without the need for a medical exam.

According to a retail life insurance sales survey from the Life Insurance Marketing and Research Association (LIMRA), the most common choice for life insurance policies is a 20-year term length.^[0]

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Which life insurance term length is right for you?

Here are the most common term lengths and who they might be a good fit for.

If your situation is more complicated, think about your longest-lasting financial responsibility. If it falls in between term periods, round up. For example, if your mortgage will be paid off in 17 years, round up your term choice to 20 years.

Note that instead of term life insurance, parents of special needs children may want to consider permanent life insurance such as a whole life insurance policy to ensure lifelong coverage.

» MORE: Term vs. whole life insurance: How to choose

How to choose the right term length

If you're wondering how long your term length should be, think about the following three factors.

1. The length of your mortgage: Your mortgage is a big part of your monthly expenses and often the main reason people buy life insurance. If you want your life insurance to cover your mortgage, consider how many years you have left until you pay off your house. You don’t want your policy to expire after 20 years if your mortgage payments will last another decade after that.

2. How long until children are on their own: While you’re raising your children, you may be paying for food, clothing and education, not to mention summer camps, music lessons, various electronic devices and so much more. How long until you can expect your kids to support themselves? That may be at least a few years beyond age 18, particularly if you’re planning to pay for college.

3. The number of years until you retire: Ideally you’ll have savings for when you stop working. So if you’re buying term life insurance primarily to replace your income, you may not need it after retirement. Once your kids are grown up, the house is paid off and you’re living off your retirement savings, a life insurance policy is one more thing you may not need to worry about.

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Should you get a 20- or 30-year life insurance policy?

Trying to decide between a 20-year or a 30-year term life insurance policy? Whether you’ve just had children or bought a new house, choose the policy term length that covers the entire timespan of your financial obligations.

A 30-year policy may seem like the safest choice, but the premiums are also likely to be higher than those of a 20-year policy. One option is to “ladder” policy terms and death benefits to scale up or down to meet your financial obligations.

What should you do when your term life insurance ends?

At the end of the term, your coverage ends and you no longer need to make life insurance premium payments. When the original policy expires, you can consider any of the following options.

Extending your policy

Many insurance companies allow you to extend your existing life insurance policy by renewing annually. Some insurers don’t require a new medical exam to renew or convert coverage, but premiums will usually increase.

Buying a new term policy

If you still have financial obligations or your situation has changed, you may want to get another term life insurance policy to cover those commitments.

Upgrading to permanent life insurance

Once a term life policy ends, you could consider converting to permanent life insurance such as a whole life or universal life insurance policy.

Going without life insurance

If you no longer need it because your financial obligations have ended or you’ve retired, free up the money you’d be paying towards life insurance premiums for other things.

» MORE: How much life insurance do I need?