Glossary

Term life insurance

Life coverage for a set number of years, such as 10, 20 or 30, that pays a death benefit only if the insured dies within that period.

Also called: term insurance, term life, term policy

Term life insurance covers you for a fixed period, commonly 10, 15, 20, 25 or 30 years. If you die during the term, your beneficiaries receive the death benefit; if you outlive it, coverage ends and nothing is paid unless you bought a return of premium feature. Most term policies have no cash value.

The most common type is level term insurance, where the premium and death benefit stay the same for the whole period. After the level period, many policies let you renew year by year at sharply higher rates, and many include a conversion privilege that lets you switch to permanent coverage without new medical underwriting before a deadline. Hypothetically, say a 35-year-old buys a $500,000, 20-year policy at $30 a month: she pays $7,200 over 20 years, and if she dies in year 12, her beneficiaries receive $500,000.

Because it's pure protection, term buys the most coverage per premium dollar, which makes it the usual fit for temporary needs such as replacing income while children are young or covering a mortgage. Its limits are that it expires, renewal rates rise steeply with age, and buying new coverage later depends on your health. See how term life insurance works and the How long a term do I need?.

Last reviewed October 4, 2026

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Related terms

Level term insurance Term life coverage whose death benefit and premium both stay fixed for a set period, such as 10, 20 or 30 years. Decreasing term insurance Term life coverage whose payout shrinks on a set schedule over the policy's term, often to track a mortgage or other loan balance. Conversion privilege A term policy feature that lets the owner switch to permanent coverage with the same insurer without new medical underwriting, within set deadlines. Guaranteed renewable A provision giving you the right to renew coverage at the end of each term without new medical underwriting, at a higher age-based premium. Permanent life insurance Life coverage designed to last for the insured's whole life as long as it is funded, usually with a cash value account that grows over time. Return of premium rider An add-on to a term policy that refunds the premiums paid if the insured is still living when the level term ends.

Related guides

10-year term life insurance: who it suits The shortest common level term. It fits needs that end within a decade, such as a loan or the years before retirement, and rarely suits young families. 20-year term life insurance explained A 20-year term fixes your premium for two decades, long enough to raise young children or cover most of a mortgage. How it works, who it fits and what to check. 30-year term life insurance: pros and cons A 30-year term locks your price for three decades, matching a new mortgage or a newborn. The benefits, the costs, the age limits and when a ladder works better. AARP life insurance: how the New York Life program works AARP does not insure anyone. New York Life issues the term, permanent and guaranteed acceptance policies sold to members. What they offer and the catches. Accidental death benefit riders: what they cover and exclude An accidental death benefit rider pays extra if you die in a covered accident. How it works, what it excludes, what it costs, and when it is worth adding. Affordable life insurance on a tight budget Protect your family when money is short: start with level term, cover the biggest risks first, use work coverage and skip costly products.

Related insurers

AAA Life The life insurer of the AAA motor club federation, based in Livonia, Michigan, selling term, whole life, final expense and annuities to AAA members and others. American Fidelity A family-owned Oklahoma City insurer selling life, supplemental health and annuities at work, mainly to school, public sector and auto dealer employees. Fidelity Life Illinois life insurer founded in 1896, owned by iA Financial Group since 2024, selling RAPIDecision term, senior and final expense policies by phone and online. American-Amicable (iA American Life) iA Financial Group's Waco, Texas insurers (American-Amicable, iA American, Occidental, Pioneer), selling final expense, term and UL through agents. Lumico Life Former Swiss Re insurer, bought by Wilton Re in April 2026, that sold term, whole life and final expense online; closed to new applications since 2025. Primerica A term-only life insurer sold through more than 150,000 independent, mostly part-time representatives who also offer investments to middle-income families.

Related tools

Buy term and invest the difference calculator Compare a whole life premium with a term premium plus an investment account, and see the return the account needs to match the policy's cash value. How much life insurance do I need? Add up income replacement, debts, college and final costs, subtract what you already have, and see how much coverage is left to buy. Which type of life insurance fits me? Answer six questions about your goal, timeline, budget, health and age to see which kinds of life insurance are built for your situation. Return of premium term calculator Finds the yearly return you earn on the extra premium of a return-of-premium term policy, and compares it with investing that money yourself. Term life ladder builder List your financial obligations and when each ends. The tool stacks term policies so coverage steps down as the obligations disappear. How long a term do I need? Enter when your children become independent, your mortgage ends and you retire. The tool finds the shortest standard term that outlasts them.