Term Life Insurance

How term life insurance works

You pick a coverage amount and a term. If you die during the term, the insurer pays your beneficiaries the death benefit as a lump sum. With a level term policy, the premium stays the same for the whole term. The policy builds no cash value. Most people buy it while they're raising a family or have kids in college.

How term life insurance works and level term explained go deeper.

How long a term, and how much coverage

Match the term to the years someone will depend on you: until the kids finish school, or the mortgage is paid. Longer terms also put off the day you'd face a higher renewal premium. On the amount, ask which needs would continue after you're gone: replacing your income, final expenses, debts, child care, college. Don't lean on work coverage alone. A basic group policy usually pays one or two times your salary and typically ends when you leave the job. In 2025, 26% of adults with life insurance had it only through an employer. Run your numbers with our coverage calculator.

What drives the price

Life insurance is generally cheaper when you're young and gets pricier as you age, and your health history and habits like smoking play a key role. Most people guess high: in 2025, healthy adults aged 18 to 30 put the price of a $250,000 20-year level term policy at roughly 10 to 12 times its true cost, and cost was the top reason (46%) people with a coverage gap gave for not buying. Our term life cost guide and rates by state have real numbers.

When the term ends

Outlive the term and the policy ends. Most term policies can be renewed even if your health has changed, but the new premium is based on your age then, so it goes up. Insurers usually sell term only up to age 70 or 80. Convertible policies let you swap into permanent coverage with no new exam or health questions, usually only until you turn 65, at a higher premium. Permanent insurance costs more, but for lifetime coverage it may be more cost effective.

More in renewable term explained and what happens if you outlive the term.

How buying works, and what to do next

Depending on the policy, the insurer may ask health questions or want a medical exam. Answer honestly: if a false statement turns up after the policy is issued, the insurer could reduce or cancel your coverage. A few rules worth knowing:

• Contestable period: for the first two years the insurer can recheck your application and deny a claim over wrong or missing information, even an honest mistake unrelated to how you died.
• Free look: you can return a new policy for a full refund, usually within 10 days of receiving it, longer in some states.
• Grace period: most policies give you 31 days past a due date before the policy lapses.
• Beneficiaries: don't name a minor child, since insurers won't pay a minor; consider a trust or your estate instead.

Get quotes from several insurers and compare like with like, not just price. Replacing a policy? Keep the old one until the new one arrives. Where to buy term life covers the options, and when you're ready you can compare term life insurance quotes online.