Term Life Insurance

How term works

You choose a coverage amount and a term length, commonly 10, 15, 20 or 30 years. You pay a level premium for that period. If you die during the term, the policy pays the death benefit to your beneficiaries, income tax free in most circumstances. If the term ends and you are still living, the coverage stops.

That last part is what makes term inexpensive, and it is why term is the right answer for most people buying life insurance for the first time.

Choosing the amount

The standard rules of thumb are a starting point, not an answer. What actually matters is what would need to be paid for if your income stopped: the mortgage balance, the years of income your household depends on, childcare, remaining education costs, and any debt that would not be forgiven.

We work through those numbers with you rather than quoting a round figure, because being underinsured defeats the purpose and being overinsured means paying for coverage that does nothing.

Choosing the term length

The useful question is when the need ends. A 32-year-old with a newborn and a 30-year mortgage has a different answer than a 50-year-old whose children have finished school and whose house is nearly paid off. Match the term to the obligation and you are not paying for years you do not need.

The conversion feature people forget to ask about

Most term policies include a conversion privilege that lets you convert some or all of the coverage to permanent insurance later without new medical underwriting. The deadline and the terms vary considerably between carriers, and it is rarely the first thing anyone mentions.

It matters because health changes. A conversion option is what protects you if you develop a condition during the term that would make you uninsurable afterward. We compare it as part of the quote, not as a footnote. If permanent coverage is what you actually want, see whole life insurance.

Underwriting

Rates depend on age, health, tobacco use and sometimes on a paramedical exam, though a growing number of carriers offer accelerated underwriting with no exam for healthy applicants within certain age and coverage limits. As an independent broker we know which carriers treat which conditions favorably, which is often worth more than shopping the advertised rate.