Length of term and face amount keys to term life insuranceMany financial planners and insurance experts praise the benefits of term life insurance over whole life insurance.

According to the National Association of Insurance Commissioner's (NAIC) definition, a term life insurance policy is a type of life insurance that only covers a person for a specific number of years. The most popular terms are 10, 20, or 30 years, but one-, two- or five-year increments are also readily available. Term life insurance pays a death benefit if the insured dies within the term. The insurance policy expires once the term is up.

Cheap life insurance begins with term

While policyholders of term life insurance do not build cash value to take home with them at the end of the policy, they are rewarded with low life insurance rates when compared to whole life insurance policy rates.

For example, a 40-year-old male, who falls in the category of "standard" risk, might be able to purchase a 20-year term life insurance policy for around $600 annually, according to the Insurance Information Institute (III). Since term life insurance is purely protection, and not an investment vehicle, it is critical to get the length of coverage just right. Pinpointing why you are buying coverage can go a long way toward a successful purchase.


Protect your youngest child's future

For most people, life insurance is not a permanent need. You need to protect the people who depend on your income should you die prematurely, however.

Many people find the best length of coverage by considering their children. After all, you should have at least enough term life insurance coverage to recreate your income through their college years, according to the III's recommendation. So, if your youngest child is twelve years-old, a ten-year term life insurance policy may be the best choice. That would provide financial protection for the baby of the family through college graduation.

Cover the length of your mortgage

If your motivation for purchasing affordable life insurance is to make sure your family has a roof over its head, the length of your mortgage is the secret to success. If you were to die, your heirs would either have to sell the family home or continue making mortgage payments. If you just purchased a home with a 30-year, fixed-rate mortgage, consider purchasing low cost life insurance that has a 30-year term.

These same calculation can be made for any other kind of debt. Use the number of years you will have to pay down any significant debt, or the number of years any loved one will depend on your support as a way to gauge the right number of years for a life insurance quote. You can't go wrong.