Term life insurance offers affordable coverage for 10 to 30 years. If you die during the term, your beneficiaries receive a tax-free payout.
Find out if term life insurance is right for you.
Updated: November 7, 2025
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What it is: Term life insurance gives you a death benefit (your coverage amount) protection for 10 to 40 years as long as you pay your premiums.
You pay fixed monthly term life insurance premium, and beneficiaries receive a tax-free payout if you die during the term.
Healthy 25-year-olds can get a 10-year, $250,000 coverage for as little as $11 per month; 35-year-olds pay around $13 per month. Term life costs increase as you age or become unhealthy.
Who should buy it: Term life is a good option for parents, homeowners, and anyone with temporary financial obligations like mortgages or dependents. Term life is less complex and cheaper than permanent life insurance options like whole life.
Term life insurance provides financial protection for your family or dependents at a specified coverage amount (called the death benefit) for a set timeframe.
This makes term life insurance the most affordable type of life coverage. You pay a fixed monthly or annual premium, and if you die during the term, your family gets the full death benefit. If you outlive the policy term, coverage ends and you won't get money back.
These terms help you navigate term life insurance decisions more confidently:
The tax-free money your beneficiaries receive if you die during the term in your policy. Also called the face amount or coverage amount.
Your monthly or annual payment to keep the policy active. Term life premiums stay the same throughout the term.
How long your coverage lasts, usually 10, 20 or 30 years. A few companies offer 40 year terms. Longer terms cost more but lock in prices.
The person or people who get the death benefit from your term life insurance policy. You can name multiple beneficiaries and specify what percentage each gets.
The right to switch your term policy to permanent life insurance without a medical exam, available until age 65 or 70.
The option to extend your term life policy after it ends. Premiums increase based on your current age.
Term life insurance follows a straightforward process: you apply for coverage, pay regular premiums, and your beneficiaries receive a death benefit if you die during the term.
How term life insurance works
Term life insurance costs less than most people expect. According to MoneyGeek's analysis, young applicants can get coverage for as little as $6 per month (18-year-old female with a 10-year policy and $100,000 coverage).
Your age, health, coverage amount and term length determine your premium. The younger and healthier you are when you apply, the less you'll pay throughout the entire term. Learn more about how much life insurance costs.
| 10 years | $13 | $156 | No |
| 15 years | $16 | $191 | No |
| 20 years | $19 | $227 | No |
| 25 years | $30 | $355 | No |
| 30 years | $33 | $392 | No |
| 35 years | $56 | $667 | No |
| 40 years | $85 | $1,018 | No |
Rates are based on average quotes for people with average weight and health ratings. Actual costs will vary depending on your profile, lifestyle, term length and coverage amount.
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Rates updated:
Nov 07, 2025
Term life insurance offers the most cost-effective death benefit protection, making it ideal for families, homeowners and anyone supporting financial dependents. Weighing the advantages and limitations helps you make the right coverage decision.
Which Type Should You Choose? Level term life insurance works for most people. Consider other types only for specific needs like mortgage protection (decreasing term) or as a supplement to employer coverage (group term).
Your life insurance premium and death benefit stay the same throughout the entire term. This is the most common term life type and what most people should choose. Simple, predictable and covers most families' needs.
Your premium stays the same but the death benefit shrinks each year. Works well for mortgage protection since the coverage decreases as your loan balance drops. Cheaper than level term but has limited use cases.
The death benefit rises over the policy term to offset inflation or increased future expenses. Useful for young families anticipating growing financial responsibilities like education or care costs.
Convertible policies let you switch to permanent life insurance without a medical exam. It's a flexible option for people who may want lifelong coverage in the future but can't afford permanent insurance now. Converted policies come with higher premiums.
These policies let you renew your coverage at the end of each term without a medical exam. Premiums increase with age. Annual renewable terms are most common, but some insurers offer longer increments.
Employer-provided coverage, often one to two times your salary. It's free or cheap but has major limitations: coverage ends when you leave your job, you can't take it with you and amounts are limited. Good as extra coverage, not your primary policy.
Refunds all your premiums if you outlive the policy term. Sounds appealing but costs two to three times more than regular term insurance. Most people get better value buying regular term and investing the difference.
Finding the best term life insurance policies depends on individual circumstances and specific financial needs.
Calculate how much coverage your family needs to replace your income, pay off debts and cover major expenses. A common starting point is 10 times your annual income, but consider your specific situation, including any outstanding mortgage balance, other debts (student loans, credit cards), children's future college costs, and number of years until dependents are financially independent. You can also get a quick estimate using our life insurance calculator.
Term life insurance gives you the most coverage for the least money. If you have dependents or debts, it's the best choice. Rates increase with age and health problems can make coverage expensive or impossible to get. Healthy 30-year-olds can get a 10-year term policy with $500,000 coverage for around $20 (female) and $24 (male) per month, according to MoneyGeek's rate survey.
Choose level term coverage for 20 or 30 years with enough death benefit to replace your income and cover major debts.
Buying term life insurance is easier than purchasing other types of life insurance, but you may still have questions throughout the process.
Term life insurance makes sense for people with temporary financial obligations and dependents who rely on their income. If someone depends on your paycheck or you have debts that would burden your family, term life provides financial protection at an affordable cost.
It works best for young couples and newlyweds, parents with dependent children, stay-at-home parents, single parents and business owners who want to fund buy-sell agreements, cover business loans or compensate for lost key person income.
Yes, you can cancel a term life insurance policy anytime by stopping premium payments. Your coverage stops right away with no penalties. You won't get back any premiums already paid since standard term life policies have no cash value.
No. Term life insurance death benefits aren't taxable to beneficiaries. They get the payout tax-free, but estate taxes may apply to very large policies if the death benefit is included in the insured's taxable estate.
Yes, but only after a waiting period. Most term life insurance policies exclude suicide for the first two years. If death occurs within that period, the insurer refunds premiums instead of paying the death benefit. After two years, coverage applies.
Most term life policies include a 31-day grace period. If you pay within that time, coverage continues without interruption. If you miss the payment deadline, the policy lapses and coverage ends. Reinstating it may require additional paperwork or proof of insurability.
Yes, you can own multiple term life insurance policies as long as the total coverage amount is reasonable compared to your income and financial needs. This strategy, called "laddering," helps match coverage lengths to different financial obligations.
Term life insurance provides affordable coverage for a fixed number of years and has no cash value. Whole life insurance lasts a lifetime, builds cash value that grows tax-deferred and costs more. Term life works best for temporary needs; whole life is permanent.
Term life insurance shoppers need reliable rate data to budget for coverage that protects their families. We built our analysis around the factors that determine what you'll actually pay.
Our quote analysis: We examined 248,399 life insurance quotes from 16 companies across 250 ZIP codes nationwide. All rates reflect 2025 data.
Sample profiles: We collected quotes for nonsmokers with average health.
These profiles represent typical applicants seeking coverage.
Why we varied the profiles: Your age, gender, height, weight, tobacco use and health rating all affect your premium. We modified each factor to show how rates change across different customer types, term lengths and coverage amounts.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
He writes about economics and insurance, breaking down complex topics so people know what they're buying.
