Is term life insurance right for you?
Term life insurance, typically available for ages 18 – 80, is the best fit for most families because it’s affordable and lasts for a set number of years before expiring. Because term life insurance is purchased for a certain period, you often won’t have to pay for extra protection that you may not need. It’s ideal for specific needs and time frames: for instance, paying off your 30-year mortgage or funding your young child’s future college tuition. Term life insurance typically pays out a tax-free lump-sum amount between $25,000 and $2,000,000 and the payments and benefit are fixed, meaning that neither changes or fluctuates during your term length.
Keep in mind, term life insurance rates generally cost less when you're younger, and rates may be higher if you purchase when you’re older. The sooner you request a quote, the better your price may be. If you prefer a policy that lasts your entire lifetime, then permanent life insurance might be a better option.
What term life insurance covers
Customers buy term life insurance to cover lost income and other living expenses, including:
- Mortgage payments
- College tuition
- Funeral and burial costs
- Debt with specific end dates like an auto or business loans
Benefits of term life insurance
Term life insurance can be advantageous for families just starting out or on a budget. Here are a few reasons why:
More affordable than whole life insurance (which pays regardless of when you die), term policies only cover you for a set amount of time—and that helps decrease your rate. If you’re in your 20s and a non-smoker, the cost for term life insurance is favorable compared to someone older with health issues.
Term policies give you the freedom to choose how long your coverage should last. You can purchase a policy for just one year or choose to have your policy last for set term lengths—the most common are 10, 15, 20, and 30 years.
Death benefits from a life insurance policy generally won’t count as taxable income.
Guaranteed protection and premiums
With term policies, your death benefit is guaranteed; simply decide how much coverage you want and it stays the same during the entire term. Your fixed premium is also guaranteed not to change during your term.
Learn more about term life insurance
Progressive Answers is your go-to resource for any additional questions about term life insurance.