Imagine a world without yourself in it. Would your family need help paying the bills? Term life insurance can help you bridge that gap affordably. If you die while the policy is in force, you’ll leave behind a lump sum of cash for your loved ones.
More than a quarter of Americans who don’t have individual life insurance (27%) say they haven’t bought a policy because it's too expensive, according to a recent NerdWallet survey.
However, a 2025 Insurance Barometer Study by LIMRA, a life insurance trade group, found that healthy adults aged 35 and under are overestimating the price they’d pay for a life insurance policy by 6 to 12 times the actual cost.
Find out how term life insurance works, when to buy term life insurance coverage and why it’s one of the most affordable types of life insurance.
What is term life insurance?
The “term” in term life insurance refers to the length of your coverage. In this case, the life insurance term is the duration or span of your policy.
Term life insurance offers coverage for a specific period of time, such as 10, 20 or 30 years. The length of your term life policy should match your longest financial commitment, such as your mortgage. As long as you keep up with your premiums, your insurer will pay a sum of money to your life insurance beneficiaries if you die during the term.
Do you need term life insurance?
Term life insurance is a good choice for most people as it can cover the time of your life where you have the most financial obligations. Consider this type of coverage if:
People — like a spouse or child — depend on you financially.
Your death would be a financial burden to others.
You have debt that will be paid off after a number of years, such as a mortgage.
You’re a stay-at-home parent and your family would need to pay for help with household tasks and other services if you die.
How does term life insurance work?
Unlike whole life and other types of permanent life insurance that may last your entire life, term life insurance coverage expires when the term ends. This means that if you outlive your policy, there won’t be a payout to your loved ones. If you still need life insurance, you may be able to renew your policy, convert it to permanent coverage at a higher cost or buy another policy.
Term life doesn’t build cash value that you can borrow against, like permanent life insurance does. This is one reason term life is cheaper than whole life. Term life provides temporary coverage, and with whole life, you're paying for longer coverage and the ability to grow cash value.
How long does term life insurance last?
Term life insurance policies often last for 10, 20 or 30 years, but some insurers offer policies in one- and five-year increments. If you’re a breadwinner in your family, aim to choose a term length that matches the years your family will rely on your income.
You can buy more than one life insurance policy for extra coverage during the stages of life when you need it most. This strategy is known as “laddering,” and it’s useful if you have financial needs set to end at different times. For example, you could take out a 30-year policy to match your 30-year mortgage and a 20-year policy to cover your children until early adulthood, when they’re likely to start earning their own money.
Ideally, by the time your coverage ends, you’ll no longer need life insurance. Your children will be grown, your mortgage will be paid off, and you’ll have enough savings to be financially secure.
How much does term life insurance cost?
The average cost of a 20-year, $500,000 term life insurance policy is $26 a month, according to Policygenius, a life insurance brokerage.
Term policies are the most straightforward and affordable type of life insurance. The premiums stay the same so you know exactly how much you'll pay for your coverage over time. The cost of a term life insurance policy depends on several factors, including your age, health and gender.
» MORE: Average life insurance rates
Average annual term life insurance rates for nonsmokers
Here’s a look at how much you might pay for a $500,000, 20-year term life insurance policy as a healthy nonsmoker.
Average annual rates for men | Average annual rates for women | |
|---|---|---|
20 | $209 | $175 |
30 | $213 | $182 |
40 | $321 | $278 |
50 | $810 | $636 |
60 | $2,335 | $1,640 |
70 | $9,702 | $7,934 |
Source: LifeStein.com. Lowest three rates for each age averaged. Data valid as of Oct. 1, 2026, and rates are subject to change. | ||
Average annual term life insurance rates for smokers
Smokers tend to pay more for coverage. Below are sample rates for a 20-year, $500,000 term life insurance policy for smokers who are otherwise healthy.
Average annual rates for men | Average annual rates for women | |
|---|---|---|
20 | $739 | $550 |
30 | $788 | $645 |
40 | $1,448 | $1,152 |
50 | $3,495 | $2,560 |
60 | $8,435 | $5,965 |
65+ | $13,160 | $9,809 |
Source: LifeStein.com. Lowest three rates for each age averaged. Data valid as of Oct. 1, 2026, and rates are subject to change. | ||
To get an idea of what life insurance might cost in your situation, use the tool below.
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The advantages and disadvantages of term life insurance
Pros
Cheap, predictable premiums.
Easy to apply for online.
Lasts for the years you need coverage the most.
Cons
Beneficiaries don't get any money if you outlive the policy.
Differences between term and whole life insurance
When shopping for a life insurance policy, your first step should be to decide between the two basic types of life insurance: term and permanent. Term life insurance offers shorter-term coverage, while permanent policies — like whole life insurance — last your entire life. They also have a cash value that grows at a fixed or variable rate.
Because whole life insurance pays out regardless of when you die and includes a “cash value component” — a reserve attached to your policy that grows over time — it’s more expensive than term life insurance.
Most term policies have conversion options, which means you can convert your term life policy to permanent insurance later on. Your premiums will go up, but you can stay insured without having to prove you’re still in good health. Some policies allow conversion at any time, while others permit it only in the first few years of coverage or before you reach a certain age, like 65 or 75.
Term life insurance shopping guide
If you've settled on term life insurance, follow these steps to get the policy that best suits your needs.
1. Know the types of term life policies
Most term policies are level term life insurance. This means your death benefit and premiums stay the same for the life of the policy. Your beneficiaries receive a sum of money if you die while the policy is active. Other term life options are listed below.
Annual renewable term life insurance. 📅
This type of policy covers you for one year, with the option to renew after the year is up. Premiums usually increase after each renewal, making these policies advisable only if you have a short-term need for coverage.
Convertible term life insurance. 📑
A convertible term life insurance policy allows you to upgrade to permanent coverage before a certain deadline. This gives you flexibility to take advantage of lower premiums for term life insurance with the option to convert to permanent life insurance later without taking a medical exam.
Decreasing or increasing term life. ⬇️ ⬆️
These policies have a life insurance death benefit that goes up or down over time. One example of how to use decreasing term life insurance is for mortgage protection. People may choose this type of policy to cover a specific debt that they plan to pay off during the term.
Group term life insurance. 👥👥
Many employers offer free or subsidized group life insurance policies that last as long as an employee stays with the company. The death benefit is often equal to one or two years of an employee’s salary.
Return-of-premium term life insurance. 🔄
A return-of-premium life insurance policy refunds all or part of the premiums you paid if you outlive your term. It usually costs more than a regular term policy.
2. Consider policy riders
Some companies offer policy features called life insurance riders, often at additional cost. These common riders can enhance your coverage:
Accelerated death benefit rider.
Allows you to access part of your policy's payout if you're diagnosed with a terminal illness. Some insurers will allow you to tap into the death benefit with a critical or chronic illness diagnosis.
Accidental death benefit rider.
Pays an additional sum to your beneficiaries if you die in an accident.
Waiver of premium rider.
Pauses your premiums if you become unemployed or disabled and can’t work for a specified period of time, typically six months or longer.
Return of premium rider.
This add-on returns a portion of the premiums paid if you outlive the policy.
3. Understand the life insurance application process
Before you buy coverage, insurers typically want to know how healthy you are. You may need to answer some health questions, and it’s important to be truthful. Companies can reject a life insurance claim if the information you provided was inaccurate or incomplete.
The life insurance application process varies based on the type of policy you're applying for:
Fully underwritten life insurance
Traditional life insurance policies typically requires a medical exam. A medical professional may take blood and urine and check factors like your weight, height and blood pressure. Even if you have some health issues, you can generally find the lowest price by applying for a fully underwritten life insurance policy.
Simplified issue life insurance
Simplified issue life insurance policies don’t require a medical exam. You’ll still answer health questions, and the insurer may pull data about you from other sources, such as your prescription drug history and driving record.
Guaranteed issue life insurance
A guaranteed issue life insurance policy skips both the questions and the exam and doesn’t require any information about your health for approval.
With guaranteed and simplified issue life insurance, you might get rapid approval and rates similar to those you’d get if you’d taken an exam. However, if you’re in less-than-perfect health, some companies that offer this kind of instant life insurance may require a medical exam before deciding whether to approve your application.
4. Compare prices
Every insurer has its own criteria for setting rates, so premiums can vary — sometimes significantly. It's worth getting quotes from a handful of insurers to make sure you're locking in the lowest possible rate.
It’s easy to compare life insurance quotes online for term policies. Be sure to choose the same coverage amounts and options for each policy you compare.
What happens when my term life insurance ends?
Term life insurance lasts for a set number of years, while whole life insurance typically lasts your entire life. If the term ends on your term life insurance policy and you’re still alive, your coverage ends.
If you still need life insurance when your current term ends, you’ll either need to buy a new term life policy or convert your existing policy into permanent life insurance before it expires.
What is the most common life insurance term length?
Do you get your money back at the end of a term life insurance policy?
Do I need term life insurance?
Article sources
- 1.LIMRA. 2025 Insurance Barometer Study: Ensuring a Protected Tomorrow with Life Insurance. Accessed May 28, 2026.
