Term Life Insurance Is Simple. Getting It Right Takes a Little More Thought.
Term life insurance can provide a lot of protection for an affordable cost. But price isn't the only thing worth considering. How much you need, how long you need it, what else the policy gives you, and the options you'll have later can make the difference between a term policy and a solid term insurance policy.
Before You Pick a Number, Decide What You Want It to Do
There isn't a set formula that tells everyone how much life insurance they should have. Personally, I think you should start with a much simpler question: If you died yesterday, what financial problems would your family face today?
Maybe the answer is that they'll need to pay off the mortgage. Maybe your family would need to replace some or all of your income for a number of years. You may want money set aside for the kids, college, other debts, or simply enough breathing room that your family doesn't have to make major financial decisions right away.
Once you've answered that question, look at what you already have in place. Do you have life insurance through work, an existing policy, savings or other assets that would help accomplish those goals? If so, that's great.
The goal should be to figure out what's missing, then fill that gap with an amount of coverage that makes sense for your family and your budget.
What Would Your Family Actually Need?
· Income — How much of your income would need to be replaced, and for how long?
· Mortgage & Debt — Would you want debts paid off, reduced, or simply manageable?
· Children — How many years will they still depend on you financially?
· Future Expenses — College or other expenses you already know are coming.
· Time & Flexibility — Would your family need extra money to avoid making major financial decisions right away?
· What You Already Have — Existing life insurance, coverage through work, savings and other assets may already help cover part of the need.
How Long Do You Want to Lock In the Price?
One of the biggest misunderstandings I see with term life insurance is treating it like a box you check once and never think about again. You buy a policy, put it in a drawer and think, “I have life insurance.” But term insurance has a clock attached to it.
You'll commonly hear people talk about a 10-, 20- or 30-year “term.” I usually explain it as a 10-, 20- or 30-year price guarantee. If you choose a 20-year price guarantee, for example, the insurance company guarantees that your premium won't increase during those 20 years.
That doesn't necessarily mean the policy disappears at the end of year 20. Depending on the policy, you may be able to keep the coverage longer—but the price can increase significantly once the guaranteed level-premium period ends.
So the real question isn't just, “Should I buy a 10-, 20- or 30-year term?” It's, “How long do I want this amount of coverage at a price I know I can count on?”
What Could Change Over Time?
·
TODAY
│
Children at home
Mortgage and other debts
Family relies on your income
·
10 YEARS
│
Children are older
Mortgage may be smaller
Savings may have grown
·
20 YEARS
│
Children may be independent
Fewer debts and obligations
Retirement is getting closer
·
30 YEARS
│
Mortgage may be paid off
Retirement savings may have grown
Your original needs may have changed
Ideally, some of the financial needs you're protecting today will shrink or disappear over time. But life doesn't always follow the plan. I've seen retirees whose adult children move back home—sometimes with grandchildren. I've also seen people return to work because their retirement savings weren't enough, making that income important again.
That's why I also pay attention to the options a term policy gives you later. If you still need life insurance when your original price guarantee is ending, your health at that point may make buying a new policy difficult or expensive. Depending on the policy, you may have the option to convert some or all of the coverage to permanent life insurance without going through the medical approval process again.
Don't Step Over Dollars to Pick Up Dimes
Two $1 million term policies with the same 20-year price guarantee may look almost identical on a quote. One might even be a few dollars cheaper each month.
But what are you giving up for those few dollars?
Depending on the policy, there may be important differences in what you're actually buying—such as having access to part of the death benefit if you become seriously ill, options to keep life insurance in place later without proving you're still healthy, and whether the price you're being quoted is one you're realistically able to qualify for.
Saving $4 a month doesn't mean much if you gave up a benefit that could be worth tens or even hundreds of thousands of dollars down the road.
Plans May Look Almost Identical on a Quote
| Policy A | Policy B | |
| Coverage | $1,000,000 | $1,000,000 |
| Price Guarantee | 20 Years | 20 Years |
| Monthly Price | $48 | $52 |
$4 Difference
But are the policies actually the same?
What If You Get Seriously Sick but Don't Die?
Most people think of life insurance as money their family receives after they die. That's obviously important. But depending on the policy, you may also be able to access part of the death benefit while you're still alive if you experience a qualifying serious illness.
That's one reason I look beyond just the monthly price.
│Terminal Illness
What memories would you create if you knew your time was limited?
│Critical Illness
What happens to your finances if a heart attack, stroke or cancer keeps you from working?
│Chronic Illness
What would change financially if you could no longer shower, dress or care for yourself without help?
Not every policy includes the same benefits, and the details matter.
The Lowest Quote Means Nothing If You Can't Qualify for It
The price you see online is based on the health class selected—not necessarily the one an insurance company will ultimately offer you.
Different insurance companies may look at the exact same health history very differently. That's why where you apply—and the type of approval process you use—can matter just as much as the price you're quoted.
Same Goal. Different Starting Points.
│Healthy & Straightforward
Don't pay extra for coverage promising "No Medical Exam" just because the process seems easy.
│A Few Health Concerns
A medication or health condition doesn't automatically mean higher rates. The key is to find the right insurance company that favors your specific history.
│Significant Health History
Applying to the wrong company can mean paying more—or getting declined while another company would have made you an offer.
Your Health Can Change. Your Options Don't Have To.
You may be perfectly healthy when you buy term insurance then develop cancer, heart disease or another serious health condition years later.
That's when a good term conversion option can become extremely valuable. Depending on the policy, you may be able to move some or all of your term coverage into permanent life insurance without proving that you're still healthy.
Different policies can have very different conversion options and deadlines.
WHEN YOU BUY THE POLICY
Age 40
Healthy
$1,000,000 term coverage
20-year price guarantee
│
18 YEARS LATER
Age 58
Health has changed
Still needs some life insurance
Buying a new policy may now be difficult or expensive
│
THE OPTION YOU KEPT
Conversion may allow you to keep life insurance in place without going through the medical approval process again.
Start With What You Need. Then Compare the Options.
1
Understand the Need
What are you protecting, how much coverage makes sense, and how long is it likely to matter?
2
Compare the Right Options
Price matters, but so does your health, the insurance company, the benefits included, and the options you'll have later.
3
Make the Decision
We'll explain the differences. You decide what makes sense for you.
I've been helping people make these decisions since 2009.
Other Common Questions About Term Life Insurance
How much does term life insurance cost?
Your cost depends on your age, health, the amount of coverage and how long you want the price guaranteed.
Two people buying the same amount of coverage can pay very different prices. And remember, a quote is based on a health classification—the price that matters is the one you can actually qualify for.
If you'd like to run a few estimates yourself, feel free to use our "Life Insurance Rates" calculator at the top of this page.
Do I need a medical exam to get term life insurance?
Not necessarily.
Many companies can approve some applicants without an exam, depending on things like age, health history and the amount of coverage.
But I wouldn't choose a policy simply because it says “no medical exam.” Sometimes the easier application isn't the better deal.
Can I get term life insurance if I have health problems?
Possibly.
A health condition doesn't automatically mean you can't get good coverage. Insurance companies can look at the exact same medical history differently, which is why choosing the right company before you apply can make a big difference.
What happens when my term life insurance price guarantee ends?
It all depends on the policy and the company standing behind it.
You may be able to keep the coverage at a higher price, convert some or all of it to permanent insurance, replace it with a new policy, or simply let it end.
This is one reason I like looking at those options when you buy the policy—not 20 years later when your health may have changed.
Can I use life insurance I already have instead of buying another policy?
Absolutely.
If an existing policy already covers part or all of what your family would need, it should be part of the conversation.
The goal isn't to buy more life insurance just to buy more life insurance. It's to figure out what's missing and fill the gap.
Is the life insurance I have through work enough?
Maybe. I advise clients to get as much as they reasonably can through work, but I don't necessarily depend on it being there when their family needs it most.
Count it when figuring out what you already have, but understand what happens to that coverage if you change jobs, retire or lose the benefit.
Some workplace policies can be continued or converted, while others end when your employment ends or when your employer stops offering the benefit.
Should both spouses have life insurance even if one doesn't work outside the home?
In most families, yes.
Income isn't the only thing a family can lose. Think about childcare, transportation, meals, household responsibilities and everything else that would suddenly have to be replaced or handled differently.
The question isn't just how much someone earns—it's what would change financially if they weren't there.
Kevin Woolley
Founder | Woolley & Woolley Insurance Group
Ready to Figure Out What Makes Sense for You?
You don't need to know exactly how much coverage you need, which company to choose, or which options matter most before we talk. That's what the conversation is for.
I'll help you compare the options and explain the differences. You decide what makes sense for you and your family.