Term Life Insurance: How Long Should Your Coverage Last?

Your term life insurance policy enables you to target risk with precision, choosing the right length of coverage to cover financial obligations that have an end date. 

The 20-year term life policy remains the most popular choice, but is a 20-year term the right choice for you? It depends on what you need to insure. Life insurance can be a powerful financial planning tool, and a term policy lets you choose the duration of the policy. 

Your age plays a role in eligibility, but many buyers qualify for terms ranging from 5 years up to 30 years, or perhaps even longer. Some situations call for a 20 or even 30-year policy. Others may be well-served with a 5 or 10-year life policy.

For example, if you just purchased a house with a 30-year mortgage, you might consider a 30-year policy to ensure your family can pay for the ongoing financial commitment. In another scenario, maybe you’ve already had your home for a while but are expecting twins. The financial commitment of raising children lasts about 20 years, so a 20-year term policy might be the right choice.

You can also use a term policy to give a new business an extra margin of safety. A new business can be costly before it starts cash flowing. Borrowing is a common way to fund a new business. If you passed unexpectedly, a policy with a shorter term could offer a cost-effective way to pay for ongoing expenses or pay off the loan, allowing your family or business partners to make the changes they need to unwind the business, stabilize it, or sell it. 

Many times, term life insurance needs revolve around loans, but a term policy offers a cost-effective solution to nearly any coverage need that has an end date. And because coverage targets a specific time frame, a term policy can be much more affordable than permanent life insurance.

Maybe it’s a new business, a new car, a new home, or you’re expecting new members of the family. A term policy might be the perfect solution to safeguard your family’s financial security. Contact your agent or broker for a no-obligation quote. You might be surprised to learn how affordable term life insurance can be.