How much term life insurance do I need?

A common rule of thumb is 10-15x your annual income, but the right amount depends on your debts, dependents, existing savings, and spouse's income. Consider covering your mortgage balance, children's education costs, and 10+ years of income replacement.

What happens when my term life insurance expires?

When the term ends, coverage stops. Some policies offer a renewal option at a much higher premium based on your current age. Many people choose not to renew because by then their mortgage is paid down, children are grown, and retirement savings have accumulated.

Term Life Insurance Definition and Meaning

Life insurance that covers you for a set number of years—10, 20, or 30—and pays your beneficiaries a tax-free death benefit if you pass away during that window.

Term life insurance is the most straightforward (and cheapest) way to make sure your family is financially protected if something happens to you. You lock in a fixed premium for a set period, and if you die during that term, your beneficiaries get a tax-free payout. If you outlive the term, coverage simply ends.

That structure makes it a natural fit for obligations that shrink over time—a 30-year mortgage, your kids' college fund, or replacing your income while you're still working. To put costs in perspective, a healthy 30-year-old can typically get $500,000 of 20-year coverage for around $20-$30 per month.

Unlike whole life or universal life (sometimes called permanent insurance), term life has no cash value or investment component baked in. That's exactly why it's so affordable—often 5-15x cheaper than permanent policies for the same death benefit.

A strategy many financial planners recommend: buy the affordable term policy for protection, then invest the money you're saving on premiums into a diversified portfolio through a brokerage account. You can track both the policy cost and your investments in Clarity.

Frequently Asked Questions