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This content has been reviewed by an experienced licensed SelectQuote life insurance agent to ensure accuracy. Learn more about our editorial standards.
by Kelly Ng last reviewed August 2022

What is term life insurance?

Life insurance, specifically term life insurance, is the most affordable way to protect your family’s financial security if something were to happen to you. It gets its name because you choose the term (or length) of the policy. This means you can choose a term policy that meets your needs for length of coverage.

While term life insurance doesn’t build up a cash value like permanent life insurance (also known as whole life insurance), it’s an especially smart and inexpensive way to gain peace of mind during the years when you’re building a nest egg for retirement, paying off a home mortgage or putting away funds for your child’s college tuition.

Types of Term Life Insurance

The different term life insurance types—also known as term lengths—typically include 10-year, 15-year, 20-year, 25-year and 30-year terms. Deciding what term length is right for you and your family can be tricky, but it’s made easier by working with SelectQuote and considering the following questions:

  • How much life insurance can you afford?
  • Who depends on your financial support?
  • What are your family’s immediate and future financial needs?

How affordable is term life insurance?

There are several financial benefits to term life insurance, making it an affordable option. Since you only pay for it as long as you need it, term life insurance is considerably more affordable than whole life insurance or other types of permanent life insurance. You may be able to find a $500,000 coverage 10-year term life insurance policy for as low as 60 cents a day.**

Use the life insurance calculator below to help determine how much life insurance you need.

Key Features of Term Life Insurance

There are several features to term life insurance, but the main benefits include:

Multiple Term Lengths

Term life insurance provides coverage for a specific period of time, generally between 10 and 30 years.

Pre-Existing Condition-Friendly

We partner with several carriers who are more likely to approve term life insurance for cancer survivors, individuals with diabetes and people who take medications for cholesterol, blood pressure and other conditions. In such cases, we’re able to shop on your behalf for the most affordable premiums for you.

Tax-Free

If you should pass away while the policy is active, your beneficiaries will receive the benefit for the full amount of your policy (generally in a lump sum or as an annuity). In most cases, these proceeds are income tax-free, but if taken in installments, potential interest could be taxable.

Flexible Payment Options

As the policyholder, you have the option to pay your premium monthly, quarterly, semi-annually or annually, or the length of your term period. You can often get a discount for paying annually.

Fixed Premiums

Your policy remains active for the length of that period as long as you pay your premiums, and typically, your policy will be “guaranteed level,” which means your monthly premium amount never changes.

Peace of Mind

Term life insurance can help secure your family’s financial stability for both the short- and long-term. With the right term life policy, you’ll have insurance protection for your loved ones for as long as you need it, whether that’s five years or thirty.

Ability to Convert the Policy

Once the initial period of your term life insurance policy is up, you can extend your coverage by converting it into a permanent policy (like universal life insurance. You can also do this without having to complete an additional medical exam.

Frequently Asked Questions (FAQs) about Term Life Insurance

What causes of death does term life insurance cover?

All causes of death are covered by term life insurance, with the only typical exclusion being suicide in the first two years.

Why buy term life insurance?

Term life insurance can provide peace of mind for both you and your family if the unexpected happens, ensuring they will be supported financially if there is a significant loss of income.

The money from your life insurance policy can be used to cover the cost of end-of-life expenses in addition to outstanding expenses your family might still be expected to pay once you’re gone. This often includes the mortgage, utilities, college tuition, outstanding debts, etc.

What happens if term life insurance expires?

It’s important to first understand that the insurance policy’s coverage doesn’t necessarily go away, but instead, the rate at which you were paying does. After the term period ends, you can usually continue your policy on a year-to-year basis but at a much higher premium. Before that happens, though, SelectQuote is able to help you shop for a new policy to ensure you’re still receiving the coverage you need at a price that fits your budget.

What is the death benefit?

If you pass away while your life insurance policy is still active, your beneficiaries will receive a tax-free lump sum called the death benefit, which can be paid out all at once or over the course of their lifetime.

Is there term life insurance available that doesn’t require a medical exam?

Yes, there is no medical exam term life insurance available through an accelerated underwriting process. This process should not change the cost of monthly premiums, but it might lower the amount of coverage available.

Shop Term Life Insurance with SelectQuote

Term life insurance is one of the most affordable coverage options available, whether you’re just starting a family or preparing for your retirement years. SelectQuote can help you find the right term life policy to meet your needs. We’ll compare rates to help save you time and money by offering unbiased recommendations based on what’s important to you.

We shop. You save. Let SelectQuote help you get started on your life insurance journey today.