Term Life Insurance 2025 Guide
Term life insurance offers temporary protection for up to 30 years, paying a lump-sum death benefit if the insured dies during the term. The best term life insurance rates start at $15 a month for a 10-year, $250,000 policy, but costs increase with age and poor health. Compare quotes online to get the right price.
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Insurance Copywriter
Malory Will has an M.A. in English from Arizona State University. She has over four years of experience in writing for the insurance industry. With a background in health, auto, life, and homeowners insurance, Malory is passionate about making complex insurance topics clear and approachable. Her goal is to help readers make informed decisions with confidence.
Malory Will
Managing Editor
Daniel S. Young began his professional career as chief editor of The Chanticleer, a Jacksonville State University newspaper. He also contributed to The Anniston Star, a local newspaper in Alabama. Daniel holds a BA in Communication and is pursuing an MA in Journalism & Media Studies at the University of Alabama. With a strong desire to help others protect their investments, Daniel has writt...
Daniel S. Young
Licensed Insurance Agent
Michelle Robbins has been a licensed insurance agent for over 13 years. Her career began in the real estate industry, supporting local realtors with Title Insurance. After several years, Michelle shifted to real estate home warranty insurance, where she managed a territory of over 100 miles of real estate professionals. Later, Agent Robbins obtained more licensing and experience serving families a...
Michelle Robbins
Updated September 2025
Term life insurance provides simple, affordable financial protection during your family’s most critical years. Policies typically last 15-30 years, offering flexibility for different life stages and financial goals.
- Term life insurance offers coverage for 10, 15, 20, or 30 years with fixed premiums
- Mutual of Omaha leads with $15 monthly rates on a $250k, 10-year term policy
- Term life insurance rates go up with age and poor health habits
Term life insurance rates start at $15 per month for a $250,000 policy, making it an accessible choice for many households. While it doesn’t build cash value, term coverage delivers reliable income replacement, mortgage protection, and support for dependents at affordable rates.
This life insurance guide explains how term coverage works, what to expect from premiums, and where to find the best term life insurance quotes. Enter your ZIP code to get started with free instant life insurance quotes.
Understanding Term Life Insurance Policy Coverage
Term life insurance is a simple way to protect your family for a set number of years. It comes with fixed monthly payments that are lower than whole life insurance, and it pays out a lump sum if the insured passes away during the term.
Term Life Insurance Coverage Overview| Feature | Description |
|---|---|
| Coverage Length | Typically 10, 15, 20, or 30 years |
| Premiums | Fixed, lower than whole life |
| Death Benefit | Lump sum if death occurs during term |
| Cash Value | No cash value or investment |
| Renewal Options | May renew at higher cost after term |
| Conversion Option | Can convert to permanent without new exam |
| Affordability | Good for high coverage at low cost |
| Purpose | Protects income during working years |
Many people choose it to cover big needs like mortgages, income support for children, and other family expenses. However, one of the biggest disadvantages of term life insurance is that coverage ends at the end of the term. If you outlive the policy, you will have to buy a new policy and could lose any premiums you paid toward coverage
Renewable term life insurance gives you the option to extend your coverage after the term ends, though the price usually goes up as you get older. The good thing is you don’t need to take another medical exam to keep your coverage. Some policies also let you switch to permanent life insurance later if you decide you want lifelong protection.
Learn More: One Quote That Convinced Me to Get Life Insurance
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Comparing Term Life Insurance Rates & Companies
The term policy length is the number of years your coverage lasts, and it has a direct impact on the cost of life insurance. Shorter terms between 10 and 15 years are cheaper, while 30-year terms cost more. Mutual of Omaha offers the lowest rates, starting at $15 for 10 years and $35 for 30 years.
Term Life Insurance Monthly Rates by Policy Length ($250k Coverage)| Insurance Company | 10 Years | 15 Years | 20 Years | 30 Years |
|---|---|---|---|---|
 | $17 | $20 | $32 | $38 |
 | $16 | $19 | $30 | $37 |
 | $19 | $22 | $36 | $42 |
 | $17 | $20 | $30 | $39 |
 | $20 | $23 | $38 | $44 |
 | $15 | $18 | $25 | $35 |
 | $18 | $21 | $31 | $40 |
 | $21 | $24 | $39 | $45 |
 | $20 | $23 | $37 | $43 |
 | $20 | $23 | $38 | $44 |
The more popular term life insurance companies are Northwestern Mutual and New York Life, with over 17% of the national market share between them, despite being on the higher end when it comes to rates. Term life coverage can reach over $45 monthly for a 30-year policy.
While these companies stand out, more than half of the market belongs to smaller providers, which means consumers have plenty of choices when shopping for coverage. Banner Life and John Hancock stay competitive at $37 and $39 per month for a 30-year policy.
Term Life Insurance Rates Across Age and Gender
Age and gender have a big impact on term life insurance rates. Women usually pay less than men since they live longer on average, but you’ll get the best rates the younger you are when you apply for coverage. Compare term life insurance rates by age to see how costs increase for older applicants.
A 20-year-old woman pays about $18 a month, while a man the same age pays $21 monthly. By age 50, monthly rates rise to $60 for women and $75 for men, and at age 70, men can pay as high as $480 a month compared to $390 monthly for women. This shows how locking in coverage early helps keep premiums affordable.
Read More: How to Get Life Insurance Quotes
How Health Impacts Term Life Insurance Rates
Health status is often the single biggest factor in term life insurance pricing. Healthier applicants pose less risk to insurers, and those in excellent health pay the lowest premiums. Costs increase sharply for average or poor health.
20-Year Term Life Insurance Monthly Rates by Health Condition| Insurance Company | Excellent | Good | Average | Poor |
|---|---|---|---|---|
| $23 | $30 | $32 | $90 |
| $22 | $32 | $30 | $95 |
| $24 | $34 | $36 | $98 |
| $30 | $33 | $30 | $66 |
| $19 | $27 | $38 | $85 |
| $25 | $28 | $25 | $58 |
| $31 | $34 | $31 | $65 |
| $21 | $29 | $39 | $88 |
| $22 | $30 | $37 | $92 |
| $25 | $35 | $38 | $100 |
MassMutual is the most affordable option at $19 monthly for excellent health, but rates jump to $85 per month for applicants with poor health. Premiums climb above $90 a month at providers like Banner Life and State Farm. If you have a high-risk health history, use a term life insurance calculator to compare coverage at different price points to find an affordable plan.
Learn More: How to Finance What Your Health Insurance Won’t Cover
Term Life Insurance vs. Whole Life Insurance
The difference between term life insurance vs. whole life is that coverage ends after the term, while whole policies last a lifetime. Whole life insurance is more expensive upfront, but renewing term life later can be much more expensive as you get older (Read More: Term Life Insurance vs. Whole Life).
Term life also doesn’t build savings or investment value like a permanent policy. If you outlive the term, there is no payout, which means you may need to plan ahead for longer-lasting coverage.
Term Life Insurance: Pros and Cons| Pros | Cons |
|---|---|
| Low cost | Ends after term |
| High coverage | No cash value |
| Simple to understand | Costly renewal with age |
| Short-term need coverage | No payout if outlived |
| Flexible term options | No savings or investment |
Whole life insurance, on the other hand, lasts for the policyholder’s lifetime and builds cash value over the life of the policy. Some whole policies also lock in rates to prevent increases based on age or health changes.
Read More: How Much Life Insurance You Need
How to File a Term Life Insurance Claim
Processing a term life insurance claim involves taking a few clear steps to ensure the payout is received. Start by checking if the policy is active, contacting the insurer, and completing the required forms and documents.
How to File a Claim on Your Term Life Insurance Policy| Step | Action | Description |
|---|---|---|
| #1 | Verify policy is active | Ensure within term period |
| #2 | Contact insurer | Provide death and policy info |
| #3 | Get claim form | Request online or by phone |
| #4 | Gather documents | Death certificate, ID, form |
| #5 | Submit claim | Mail, email, or portal |
| #6 | Wait for review | Usually 7–30 days |
| #7 | Receive payout | Lump sum or selected method |
Some term life insurance companies offer an online portal for filing claims, but most will require you to speak with an agent to finalize details and payments (Learn More: Best Insurance Companies for Claims Handling).
You can expect a term life insurance claim payout in 7-10 days, but most take up to 30 days to process.
Jeff Root Licensed Life Insurance Agent
After review, the benefit is released as a lump sum or fixed payment option. Filing a claim is usually straightforward if you have the right documents ready, including the death certificate and the deceased’s ID.
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Deciding to Buy Term Life Insurance
Term life insurance is a low-cost way to get a large amount of financial coverage, which makes it easier for families to fit into their budget. The policy is straightforward to understand, with fixed monthly payments that remain constant throughout the policy term. You can also choose how long you want coverage to last, such as 10, 20, or 30 years.
Top 7 Reasons to Buy Term Life Insurance| Purpose | Benefits |
|---|---|
| Income Replacement | Supports dependents if earner dies |
| Mortgage Protection | Pays off balance during loan term |
| Raising Children | Covers dependents until adulthood |
| College Expense Coverage | Ensures funds for kids' education if parent dies |
| Business Planning | Protects key roles or buy-sell needs |
| Temporary Coverage Need | Good for short-term needs (e.g., 20 years until retirement) |
| Budget-Conscious Buyers | Lower cost suits young buyers and families |
Term life insurance benefits include helping with college costs, keeping a business secure, or providing short-term coverage until retirement. Since it costs less than permanent life insurance, it’s a smart choice for young families and anyone looking for affordable protection. Start comparing term life insurance rates near you by entering your ZIP code into our free quote tool.
Frequently Asked Questions
What is term life insurance?
Term life insurance is a type of policy that provides coverage for a set period, usually 10, 15, 20, or 30 years. If the insured person passes away during the term, the policy pays a lump-sum death benefit to the life insurance beneficiary.
What is an example of term life insurance?
An example is a 20-year, $250,000 policy. If the insured person dies within those 20 years, the family receives $250,000. If the person lives past the term, the policy ends with no payout.
What are the disadvantages of term life insurance?
The main drawbacks are that coverage ends after the term, premiums increase if renewed, and there is no cash value or savings feature. If you outlive the policy, there is no payout.
Can I cash out term life insurance?
No, you cannot cash out term life insurance. Unlike whole life or universal life insurance, term life does not build cash value. It only provides a death benefit during the policy’s term.
Can I cancel term life insurance?
Yes, you can cancel term life insurance at any time by notifying your insurer. However, you won’t receive a refund for premiums already paid, since term policies have no cash value. If you want to explore your life insurance options, enter your ZIP code using our free tool to get started.
How do you claim term life insurance?
To file a claim, the beneficiary must contact the insurer, complete a claim form, and provide documents such as a death certificate. Once reviewed, the insurer issues the death benefit, usually within 7–30 days.
What is the cash value of a $100,000 term life insurance policy?
If it is a term life policy, there is no cash value. A $100,000 whole life policy, however, will build cash value over time, which depends on how long the policy is active and how premiums are paid.
Can you borrow from term life insurance?
No, you cannot borrow from term life insurance. Only permanent life policies with cash value, such as whole or universal life, allow borrowing against the policy.
Read More: What is a life insurance annuity?
Which is better, term life or whole life insurance?
Which type of life insurance is best? Term life is usually better for people who want affordable coverage for only a set number of years, such as paying off a mortgage. Whole life is more expensive but lasts a lifetime and builds cash value, which may be better for long-term financial planning.
At what age does term life insurance end?
Term life insurance typically ends when the selected term expires, such as 20 or 30 years. Some companies allow renewal up to age 70 or 80, but the premiums become much higher with age. Explore more insights in our guide about single premium life insurance.
Can I convert my term life insurance to whole life?
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