when you consider the amount of coverage you can get for your premium dollars term life insurance tends to be the least expensive life insurance check our recommendations for the best term life insurance policies when you are ready to buy 
example of term life insurancethirty year old george wants to protect his family in the unlikely event of his early death he buys a 10 year 500 000 term life insurance policy with a premium of 50 per month if george dies within the 10 year term the policy will pay george s beneficiary 500 000 if he dies after the policy has expired his beneficiary will receive no benefit if he remains alive and renews the policy after 10 years the premiums will be higher than his initial policy because they will be based on his current age of 40 rather than 30 if george is diagnosed with a terminal illness during the first policy term he probably will not be eligible to renew the policy when it expires some policies do offer guaranteed re insurability without proof of insurability but such features come with a higher cost types of term life insurancethere are several types of term life insurance the best option will depend on your individual circumstances generally most companies offer terms ranging from 10 to 30 years although a few offer 35 and 40 year terms level premium insurance has a fixed monthly payment for the life of the policy most term life insurance has a level premium and it s the type we ve been referring to in most of this article as we mentioned before this type of policy generally provides coverage for a period ranging from 10 to 30 years the death benefit is also fixed because actuaries must account for the increasing costs of insurance over the life of the policy s effectiveness the level premium is comparatively higher than yearly renewable term life insurance 4yearly renewable term yrt policies are one year policies that can be renewed each year without providing evidence of insurability the premiums rise from year to year as the insured person ages thus the premiums can become prohibitively expensive as the policyholder ages but they may be a good option for someone who needs temporary insurance these policies have a death benefit that declines each year according to a predetermined schedule the policyholder pays a fixed level premium for the duration of the policy 5decreasing term policies are often used in concert with a mortgage with the policyholder matching the payout of the insurance to the declining principal of the home loan benefits of term life insuranceterm life insurance is attractive to young people with children parents can obtain substantial coverage for a low cost and if the insured dies while the policy is in effect the family can rely on the death benefit to replace lost income these policies are also well suited for people with growing families they can maintain coverage needed until for example their children reach adulthood and become self sufficient the term life benefit may be equally useful to an older surviving spouse however premiums for people who wait until they are older to apply for insurance will pay higher premiums than if they d gotten a level term policy when they were younger each insurance company sets a maximum age for their term life insurance coverage this usually ranges from about 80 to 90 years old term life insurance vs permanent life insurancethe main differences between a term life insurance policy and a permanent insurance policy such as whole life or universal life insurance are the duration of the policy the accumulation of a cash value and the cost the right choice for you will depend on your needs here are some things to consider term life policies are ideal for people who want substantial coverage at a low cost people who own whole life insurance pay more in premiums for less coverage but have the security of knowing they are protected for life people who buy term life pay premiums for an extended period but they get nothing in return unless they have the misfortune to die before the term expires plus term life insurance premiums increase with age unless a term policy is a is guaranteed renewable the company could refuse to renew coverage at the end of a policy s term if the policyholder develops a severe illness permanent insurance provides coverage for life as long as the premiums are paid regardless of changes in the insured s health some customers prefer permanent life insurance because the policies typically contain an investment or savings vehicle a portion of each premium payment is allocated to the cash value which usually grows while the policy remains in force some plans pay dividends which can be paid out in cash or left on deposit within the policy over time the cash value may grow large enough to pay the premiums on the policy there are also several unique tax benefits such as tax deferred cash value growth and tax free access to the cash portion but financial advisors warn that the growth rate of a policy with cash value is often paltry compared to other financial instruments such as mutual funds and exchange traded funds etfs also substantial administrative fees often cut into the rate of return this is the source of the phrase buy term and invest the difference however the performance of permanent insurance can be steady and it is tax advantaged providing additional benefits when the stock market is volatile there is no one size fits all answer to the term versus permanent insurance debate other factors to consider include term life insurance vs convertible term life insuranceconvertible term life insurance is a term life policy that includes a conversion rider the rider guarantees the right to convert an in force term policy or one about to expire to a permanent plan without going through underwriting or proving insurability the conversion rider should allow you to convert to any permanent policy the insurance company offers with no restrictions 6the primary features of the rider are maintaining the original health rating of the term policy upon conversion even if you later have health issues or become uninsurable and deciding when and how much of the coverage to convert the basis for the premium of the new permanent policy is your age at conversion of course overall premiums will increase significantly since whole life insurance is more expensive than term life insurance the advantage is the guaranteed approval without a medical exam medical conditions that develop during the term life period cannot cause premiums to be increased however the company may require limited or full underwriting if you want to add additional riders to the new policy such as a long term care rider 