Term

Term Life Insurance

Term insurance is the cleanest, lowest-cost way to put a large death benefit in place during your highest-responsibility years. Some term policies offer conversion to permanent coverage, subject to the policy’s conversion terms and deadlines.

What it includes

Level-premium terms, typically 10, 20 or 30 years; available lengths vary by policy
Return-of-premium options on select carriers
Conversion options depend on the policy’s terms and deadlines.
Approval and timing set by each carrier’s underwriting

Who it’s for

Young families, mortgage holders, and anyone needing temporary high coverage at the lowest possible premium.

How long should your term be?

Updated October 16, 2026

Weigh when the obligations you want insured should end, such as your youngest child’s independence, your mortgage payoff or your planned retirement, against the premium you can keep paying. Needs often shrink over time, so the longest date isn’t automatically the answer. A longer term generally costs more for otherwise comparable coverage, and what happens when the initial level-premium period ends depends on the policy’s renewal and conversion terms.

Term lengths compared

Term lengths compared: when each can fit, and what to check before choosing
Term length	Can fit when the obligation you most want insured ends	Check before choosing
10 years	Within about 10 years: a short loan, your last working years before retirement, or children who are nearly independent.	What the premium would be if you renew after year 10, and whether you could still convert if the need lasts longer.
15 years	In about 11 to 15 years: children in middle or high school, or a mortgage with about 15 years left.	Whether a 20-year quote would cover five more years at a difference you are comfortable paying.
20 years	In about 16 to 20 years: young children through school, or much of a recent mortgage.	Whether your mortgage payoff or planned retirement falls after year 20, and whether that later need will still be as large.
25 years	In about 21 to 25 years.	The same timing check: your payoff and retirement dates against year 25.
30 years	In about 26 to 30 years: a newborn, a new 30-year mortgage, or the working years of someone in their mid-30s.	A longer term generally costs more for otherwise comparable coverage; compare one 30-year policy with a ladder.
Longer than 30 years	More than 30 years away, such as the working years of someone in their 20s.	Ask whether an initial level-premium period this long is offered at your age and in your state, and whether part of the need is really lifelong.

Length is one of the price factors below: see what sets your monthly price.

When the initial level-premium period ends

For the level-term options compared here, the selected length is the initial level-premium period. When it ends, coverage does not necessarily stop at once. Depending on the policy, you may be able to renew it, at a higher premium and sometimes only up to a set age, or convert it to permanent coverage before the policy’s conversion deadline. If the policy allows neither, or you don’t use them, the coverage ends. The policy’s own terms control.

When the dates don’t line up: a ladder

A ladder is two or more term policies with different initial level-premium periods, bought together, so total coverage can step down as obligations are expected to end. Each policy is a separate contract with its own premium, renewal and conversion terms. Whether a ladder costs less than one longer policy depends on the quotes, so compare both at the same coverage amount and health class.

A worked example (hypothetical, no prices)

Hypothetical household, not a client case: you are 38, your children are 4 and 7, 26 years are left on the mortgage, you plan to stop working at 65, and you plan to support your children until 22. Assume, for this educational example only, $1,000,000 of coverage split into $500,000 for the children’s years and $500,000 for the mortgage and your income until retirement. The split is an assumption, not a calculation or a recommendation.

Worked example: when each obligation ends
Obligation	Ends after	Your age then
Youngest child reaches 22	18 years	56
Mortgage paid off	26 years	64
Planned retirement	27 years	65

Worked example: four ways to structure the coverage, compared by dates
Structure	Coverage	Against the stated dates
One 20-year term, $1,000,000	$1,000,000 for years 1–20	The initial level-premium period ends at age 58, 6 years before the mortgage payoff and 7 years before the planned retirement.
One 25-year term, $1,000,000	$1,000,000 for years 1–25	The initial level-premium period ends at age 63, 1 year before the mortgage payoff and 2 years before the planned retirement.
One 30-year term, $1,000,000	$1,000,000 for years 1–30	The initial level-premium period runs past every stated obligation: 12 years past the children’s date and 3 years past the planned retirement.
Ladder: $500,000 for 20 years plus $500,000 for 30 years	$1,000,000 for years 1–20, then $500,000 for years 21–30	The 20-year policy’s initial level-premium period runs 2 years past the children’s date; the 30-year policy’s runs 3 years past the planned retirement.

The example compares dates, not prices or needs. A policy whose initial level-premium period ends before an obligation may still suit a household whose need will have shrunk, or that will have other resources, by then; and which structure costs less depends on quotes for your age, health class and carrier. A mortgage balance falls over time, so that part of the need also shrinks; the example keeps it level for simplicity.

Term length is the main decision if

People depend on your income for a period you can roughly date.
You have a mortgage or other debts you would want paid off.
You want lower-cost coverage for a specific period.

Look beyond term if

Part of the need lasts for life, such as final expenses, a dependent who will need lifelong support, or estate costs.
No one depends on your income and your debts are covered.
Your health may change and you might want coverage longer than planned: weigh the conversion terms as heavily as the length.

For a lifelong need, compare whole life and indexed universal life.

Questions to settle before choosing a length

When does your youngest child become financially independent in your plan, and will you pay for education beyond that?
How many years are left on your mortgage and other debts you would want paid, rather than their original terms?
When do you plan to stop working, and would your partner or family still depend on retirement savings you haven’t built yet?
Will the need shrink as debts are paid and children grow, and would a ladder follow it more closely than one policy?
Can you keep paying the premium for the whole initial level-premium period, including if your income dips?
Is any part of the need lifelong? That part may suit permanent coverage.
What would the premium be if you renew after the initial level-premium period, and is there an age after which you can’t renew?
How long does the conversion option last, and which policies can you convert to?
If you have life insurance through work, could you keep it if you leave the job?

Sizing the mortgage part of the need? See mortgage protection vs home equity.

Facts that can move the dates

Renewal and employer coverage: most term coverage can be renewed at the end of the term even if your health has changed, but the new premiums are higher, and some policies stop renewing at a set age. Life insurance through an employer usually pays less than you need and may not go with you if you leave. (NAIC Life Insurance Buyer’s Guide.)
Social Security child’s benefits on a parent’s record generally end at 18. They can continue for an unmarried child who is a full-time elementary or secondary school student, generally until 19, and for a child whose disability began before 22. Attending college does not by itself continue them. Count only the benefits Social Security estimates for your family. (20 CFR 404.350, 404.352 and 404.367.)

Educational information, not advice or an offer of insurance. Availability of each term length, renewal and conversion terms, and premiums depend on the carrier, your age, your state and underwriting; the policy’s own terms control.

Sources for this section

Sources accessed October 16, 2026.

When you have the dates, estimate the amount with the coverage need calculator, then compare quotes for the lengths you are considering.

What term life insurance costs each month

Updated October 15, 2026

What you pay each month depends mainly on your age when the policy is issued, the health class the carrier assigns after underwriting, tobacco use, the coverage amount and the term length. Published rate studies show the scale for their own sample applicants, but they are not quotes: your actual premium is set by the carrier after underwriting.

What sets your monthly price

What sets the monthly price of term life insurance, with study figures where a published study measured the factor
Factor	How it moves the monthly price	What a published study found
Age at issue	Older at issue costs more, and the premium is set for the whole level term.	Insurance Geek study (published study figures; male, Preferred Plus, non-tobacco, $500,000, 20-year term): 54% more at 40 than at 30, and another 146% more at 50.
Health class	A better class costs less. Each carrier sets its own underwriting rules, so different carriers can place the same person in different classes.	Insurance Geek study (published study figures; male, Preferred Plus, non-tobacco, $500,000, 20-year term): Standard cost 93% more than Preferred Plus at age 40 ($54.08 vs $28.03 a month).
Tobacco	Tobacco use raises the premium substantially.	MoneyGeek study (21 providers): smokers paid 130% to 230% more than nonsmokers for comparable coverage.
Coverage amount	More coverage costs more.
Term length	A longer level term costs more each month.	Insurance Geek study (published study figures; male, Preferred Plus, non-tobacco, $500,000, 20-year term): at age 40, a 30-year term cost $48.90 a month versus $28.03 for a 20-year term.
Riders	A return-of-premium rider raises the premium. Conversion terms differ by policy, so check how long you can convert and to which policies.
Carrier	Carriers price the same applicant differently.	Insurance Geek study says quotes on identical coverage can vary by 50% or more between carriers.

Two published rate studies (study figures, not CentraLife quotes)

Insurance Geek term-life rate study

Published study figures: monthly premium for $500,000 of 20-year level term, Preferred Plus (its best health class), non-tobacco, across 30+ A-rated carriers. Page updated April 2, 2026; accessed October 15, 2026. The study gives conflicting rate dates (March 2026 and August 2026), so no rate date is stated here.

Insurance Geek term-life rate study: Published study figures: monthly premium for $500,000 of 20-year level term, Preferred Plus (its best health class), non-tobacco, across 30+ A-rated carriers. Page updated April 2, 2026; accessed October 15, 2026. The study gives conflicting rate dates (March 2026 and August 2026), so no rate date is stated here.
Age	Male
30	$18.16
40	$28.03
50	$68.99
60	$199.32

Female, same assumptions: $23.77 at age 40 and $52.07 at age 50.

MoneyGeek term-life cost study

Average monthly cost of $500,000 of 20-year term for a nonsmoker with average health and average BMI, from quotes across 21 providers. Page updated October 11, 2026; the data date is not stated.

MoneyGeek term-life cost study: Average monthly cost of $500,000 of 20-year term for a nonsmoker with average health and average BMI, from quotes across 21 providers. Page updated October 11, 2026; the data date is not stated.
Age	Female	Male
30	$32	$38
35	$37	$47
40	$47	$59
45	$69	$90
50	$102	$137
60	$286	$395

These are figures each study published for its own sample applicants. The two studies use different health classes, carrier sets and methods, so their figures are not comparable with each other and are not a price range for you. They are not CentraLife quotes, not current personalized rates and not an offer of insurance; your premium is set by the issuing carrier after underwriting.

Most people overestimate the price. About three in four consumers overestimate the cost of life insurance, and 46% say their estimate was a “gut feeling” or “wild guess.” Adults under 31 overestimate the true cost of a $250K 20-year term policy by about five to six times. Source: 2026 Insurance Barometer Study, LIMRA and Life Happens (national survey of 5,237 adult financial decision-makers aged 18–75, fielded January 2026).

Comparing term quotes

Compare quotes for the same coverage amount and term length.
Check which health class each quote assumes; the final class comes from underwriting and can differ.
Compare conversion terms: how long you can convert and which policies you can convert to.
Note any rider built into the price, such as return of premium, and compare with and without it.
Look past the price to the carrier itself: see how to compare carriers.

What to have ready for a quote

Date of birth and state of residence.
Coverage amount and term length.
Tobacco and nicotine use, including when you last used it.
Height, weight, current medications and diagnoses.
Family medical history.
Driving record and hazardous activities, such as aviation or diving.
Existing life insurance, and whether a new policy would replace it.

Not sure of the amount? Estimate it with the coverage need calculator.

Tax treatment

Death benefits paid to a beneficiary are generally excluded from gross income under 26 U.S.C. §101(a), with exceptions including transfer-for-value situations and interest paid on delayed proceeds. Premiums for personal coverage are not tax-deductible. This is educational information, not tax or legal advice — verify your situation at irs.gov or with your own tax advisor.

Sources

Sources accessed October 15, 2026.

Want your number instead of a study figure?

We quote from real carrier illustrations across appointed carriers.

See my rate

Not sure how much coverage you need? Estimate it with the coverage need calculator. Deciding between term and permanent coverage? Compare whole life and indexed universal life, read how to compare carriers, or size a mortgage need with mortgage protection vs home equity.

Questions people actually ask

What is term life insurance?

Term life insurance is pure protection for a set period — typically 10, 20, or 30 years. You pay a level premium; if you die during the term, your beneficiaries receive the death benefit, which is generally income-tax-free. If you outlive the term, coverage ends. No cash value, no investment component — which is exactly why it costs a fraction of permanent coverage for the same death benefit.

How does term life insurance work?

You apply, go through underwriting based on age and health, and lock a level premium for the full term. The carrier pools premiums against actuarial mortality risk — that math is why a healthy 35-year-old pays so little for substantial coverage. If a covered death occurs during the term, the beneficiary files a claim and receives the full death benefit. On a level-term policy the premium is designed to stay the same for the level period while premiums are paid.

What does the "term" mean, and how long should mine be?

For the level-term options compared here, the selected length is the initial level-premium period — commonly 10, 15, 20, 25, or 30 years. Weigh when the obligations you want insured should end — the years left on your mortgage (not its original length), when your youngest child becomes independent, your planned retirement — against the premium you can keep paying. Needs often shrink over time, so two policies of different lengths can follow the need more closely than one. When the initial level-premium period ends, the policy’s renewal and conversion terms decide what happens next.

How to choose a term length →

What happens when the term ends?

Three paths. Let it lapse if the need is gone. Renew annually at sharply higher age-based rates — rarely the good option. Or convert to permanent coverage, which many term policies allow without a new medical exam up to a conversion deadline; check the policy’s conversion terms. Where a policy offers it, that conversion privilege is the most underused feature in term insurance: within its terms and deadlines, it can preserve your insurability even if your health has changed.

Term vs whole life — how do I choose?

Different jobs. Term buys the most death benefit per dollar for a defined window — income replacement, mortgage protection, young families. Whole life and other permanent coverage cost more but never expire and build cash value. Many families rationally hold both: term for the big temporary need, permanent for the lifelong layer. The mistake is buying either one because a blanket rule said so.

Do term life policies have cash value? Can you borrow from them?

No — term is pure protection by design, and that absence of cash value is a main reason it costs less than permanent coverage for the same death benefit. There is nothing to borrow against. If you want coverage that builds accessible, tax-advantaged value during your lifetime, that is what cash-value designs like indexed universal life are built for.

How cash-value coverage works →

Do I get my money back if I outlive my term policy?

With standard term, no — premiums bought protection, the same way car insurance premiums do. Some term policies offer a return-of-premium (ROP) feature or rider, generally at a higher premium. Whether any premiums come back, and how much, depends on the contract: which premiums are eligible and which conditions must be met. Before choosing it, compare quotes for the same coverage amount, term and health class with and without ROP, and ask what the contract pays, if anything, if you cancel early or miss payments and the policy lapses, and whether coverage must stay in force for the full term to receive any refund.

How much does term life insurance cost — say, $500,000 or $1 million?

Less than most people guess, but the honest answer is that price depends on age, health class, tobacco status, term length, and carrier underwriting. Published rate studies for sample applicants appear in the cost section on this page. Anyone quoting exact numbers without underwriting you is guessing — we quote from real carrier illustrations.

Get a real quote from carrier illustrations →

How much term life insurance do I need?

Start with the obligations that would outlive you: the years of income your family relies on, the mortgage balance, college costs and final expenses, minus savings and coverage you already have. The coverage need calculator walks through each step.

Estimate your coverage need →

Do term life policies actually pay out?

Yes — when a covered death occurs while the policy is in force, the death benefit is paid to the beneficiary. Many term policies end without a claim because the insured outlives the term or lets coverage lapse, which is different from a claim being denied. The real payout risks are misstatements on the application and lapses from missed premiums — both preventable, and both things an honest agent protects you from at application time.

What does Dave Ramsey say about term life insurance — is he right?

He recommends buy term and invest the difference, and for a young family on a budget protecting income, we often agree — term is the right first move. The blanket version of the advice breaks down at the edges: high earners who have capped tax-advantaged accounts, estate liquidity needs, business succession, and anyone whose health may make later coverage unaffordable. Rules of thumb are where planning starts, not where it ends.

Run your own numbers, not a rule of thumb →

Why do two carriers quote the same person very different prices for the same term policy?

Each carrier writes its own underwriting guidelines, so an applicant placed in Preferred Plus by one company can be placed in Standard by another for the same health file. In Insurance Geek’s 2026 study (male, non-tobacco, $500,000, 20-year term), Standard cost 93% more than Preferred Plus at age 40, and the study says quotes on identical coverage can vary by 50% or more between carriers. On a level term policy the premium generally stays the same for the level period while premiums are paid; check that the policy guarantees the level premium.

Is buying term life insurance online cheaper than going through an agent?

Not necessarily. Each carrier sets the premium for its own products, and the price you are offered depends on the carrier, the coverage and the health class you receive after underwriting. Whether a carrier’s price differs by how you apply depends on the carrier and your state, so compare the same carrier, coverage amount, term and health class either way. An online quote from a single carrier shows only that carrier’s price.

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