Discover if term life insurance - with fixed premiums and coverage for a set period - is the best choice for your financial needs.
Term life insurance provides affordable financial support for your loved ones when they need it most. It’s a straightforward way to help cover major financial goals, such as paying off a mortgage or college tuition, if you're no longer there to provide for them.
What Is Term Life Insurance?
Term life insurance is the simplest form of life insurance. It pays a death benefit to your beneficiaries if you pass away during the policy term. You choose a fixed premium period—typically 10, 20, or 30 years. After this period, the cost increases with age until the policy expires.
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Who Is Term Life Insurance Best Suited For?
Term life insurance is ideal for individuals looking to cover financial obligations or goals with a set time frame, such as paying off a mortgage or funding a child’s college education. It’s also a great option for those who need a high coverage amount—such as providing financial security for a spouse and young children—but may not be able to afford permanent life insurance at the moment.
What Happens When the Term Ends?
f you outlive the term of your life insurance policy, it expires—you no longer owe premiums, and coverage ends.
However, it's important to understand what the term truly means. A "10-year" policy might mean coverage ends after 10 years, or it could be a policy that lasts until age 90, with fixed premiums for the first 10 years before costs increase. Reviewing policy details carefully ensures you fully understand how long your coverage lasts and what to expect in the future.
Can I Switch from a Term Life Policy to Whole Life Insurance?
Yes, depending on your insurer, you may have the option to convert all or part of your term life insurance into a permanent policy, such as whole life or universal life insurance, if your term policy includes a conversion option.
One key advantage of converting is that you won’t need to requalify based on your health or other risk factors—eligibility is guaranteed during the conversion period. Since this period has an expiration date, it’s a good idea to review your policy regularly with your agent to ensure you don’t miss the opportunity.
If your term policy doesn’t offer a conversion option or the conversion period has ended, you’ll need to apply for a new policy if you want permanent coverage.
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Key Differences Between Term and Whole Life Insurance
Term life insurance offers an affordable way to secure coverage for a set period. However, it eventually expires, unlike whole life insurance—a form of permanent coverage that lasts a lifetime and has the added benefit of accumulating cash value over time.
Term life insurance
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Whole life insurance
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Provides coverage at a fixed rate for a set period—typically 10, 20, or 30 years. After that, premiums may increase with age.
Offers lifetime coverage as long as premiums are consistently paid.
Premiums stay fixed during the initial level premium period. Generally, the shorter the period, the lower the cost of coverage. After this period ends, premiums increase.
Ensures fixed premiums for the entire duration of the policy.
Offers a death benefit but does not build cash value over time.
Builds cash value over time, as long as premiums are paid, and the accumulated value can be accessed during your lifetime.
Can typically be converted into a permanent policy, such as whole life insurance.
Cannot be converted into another type of life insurance policy.
