What is term life insurance?
Coverage for a set number of years. Then it ends. It costs the least per dollar of any kind.
Written by William Litner, FCAS. Last updated November 3, 2026. No prices are printed on this page; prices sit with their sources on the cost page.
- Term life insurance covers you for a set number of years, then it ends, and it costs the least per dollar of any kind.
- Most terms run 20 or 30 years, the price stays level across the term, and the policy builds no cash value.
- If you outlive the term, no payout comes back, and buying again later costs much more.
The plain facts
Set years
You pick the span: most terms run 20 or 30 years. Coverage lives inside those years. Outside them, it does not.
A level price
The price stays the same across the whole term. That steady price is why the full name is level term.
A large amount, cheaply
Term costs the least per dollar. So a family can carry a big amount while the need is big.
No cash value
Term builds no savings inside it. It is pure coverage. When the term ends, the coverage ends.
If you outlive it
No payout comes back. The coverage did its job for those years. Buying again later costs much more.
It pays one way
If you die inside the term, it pays the people you named. The amount is the amount on the policy.
Term, or a kind that lasts for life?
Whole life lasts your whole life and builds cash value. It costs much more. Guaranteed universal life also lasts for life, with cash value kept small by design.
One term kind carries a switch
Convertible term
It starts as term. Later, it can switch to life-long coverage. No new health checks are needed. Your health rating carries over.
The deadline is hard
The switch must happen inside a set window. Miss the window and the switch is gone. Ask for the date before you sign.
Why the years get matched to the need
Plain questions, plain answers
Common questions
What is term life insurance?
Term life covers set years, then ends. Most terms run 20 or 30 years. It costs the least per dollar. It pays a large amount. It builds no cash value.
What happens when a term policy ends?
Coverage ends. No payout comes back. Buying again later costs much more, because the new price uses your older age.
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