Key takeaways

• • Term life insurance is typically the most affordable life insurance.
  • Coverage amounts are often based on replacing lost income, covering debts like student loans or mortgages, and ensuring quality of life stays the same for your loved ones.
  • Terms range in length, often between 10 and 30 years.
  • There are term life insurance policies for individuals in many stages of life, from just starting out to those already enjoying retirement.

What is term life insurance?

Term life insurance is a life insurance policy that expires at the end of a set period of time, typically between 10 and 30 years. You choose the type of term length and coverage amount that works best for your needs, and you keep the policy active by making regular premium payments until it expires.

If you die while the policy is active, the insurance company pays out the death benefit to your chosen beneficiary or beneficiaries. The payout comes with no strings attached, so they can use the money for whatever they need.

Term life is different from permanent insurance, which covers you for your entire lifetime and also builds extra cash value throughout the life of the policy. Term is meant to provide just-in-case coverage during the years you need it most, whether you’re raising a family, paying off your first home, or newly retired.

Affordable, simple, and flexible, term plans are the best choice for many families.

Who is term life insurance for?

If anyone depends on you financially, like your partner, young children, or aging relatives, you need life insurance. Coverage comes in all shapes and sizes, which means you can match your policy to your budget and financial goals.

So who is term life insurance for? In general, term life is a good fit for parents, primary wage earners, or others looking to cover financial responsibilities for a set number of years. If you die, the income you’d expect to make during your prime earning years is eliminated. That can make it tough for your surviving family members to meet goals you’ve set together, such as paying off your home mortgage or covering the cost of education.

Because it’s the most affordable type of life insurance, term life can make it easier for your family to reach their financial goals if you die unexpectedly. That could mean paying for major milestones, like college tuition or becoming debt-free, but it can also help cover day-to-day expenses and preserve special moments, like family vacations.

You may need a policy if:

• You have a partner or young children who depend on your income
• You have a mortgage and want to make sure your family can keep up with the payments
• You have student loans, credit card debts, or other bills your family would need to cover
• You’re a few years away from retirement and want a financial cushion until then

Wondering if you’re a good candidate for coverage? Your eligibility for term life insurance depends on a few factors, including your age, health and medical history, and even your job and hobbies. Fidelity Life offers a variety of options to meet your goals at every stage of life, with term life plans available up to age 70.

What is term life insurance good for?

With term life insurance, you can choose a coverage amount and term length that makes sense for your budget and needs. If you die while the policy is active, your loved ones receive the coverage amount as a tax-free cash payout to spend on whatever they need.

Consider some common scenarios that term life insurance covers:

Term Life Insurance in Your 20s

Just entering adulthood? Buying term life insurance now can help you cover current and future financial needs while locking in low premiums. Since the cost of life insurance goes up with every birthday, term life insurance policies for adults in their 20s are often much less expensive than policies for people in their 30s and beyond. A 30-year term plan can keep you covered throughout your working life and potentially save you thousands in premiums over the life of the policy. Term life can help you:

• Cover student loan payments so they don’t fall on your family
• Pay your mortgage if you’ve recently bought a home or condo
• Make sure protection is in place if you’re planning to get married or start a family

Term Life Insurance in Your 30s and 40s

This is typically prime time to buy life insurance. Between getting married, having kids, buying a home, and building a career, thirty- and forty-somethings often have big financial responsibilities that need protecting. Buying a term life plan now can provide a financial safety net for your family, just in case they need it. If you’re healthy, you can typically still lock in competitive rates into your 40s.

Consider buying term life to help:

• Pay for day-to-day needs for your kids until they’re out of the house
• Cover the mortgage so your family can stay in their home
• Replace your paycheck so your partner doesn’t have to scramble to find work
• Pay off credit cards, student loans, or other debts

Term Life in Your 50s and beyond

Can you buy term life insurance for seniors? The answer may surprise you. Many the age of 70. It’s true that the cost of term life insurance increases as you get older. Yet, it may still be an affordable alternative to permanent life insurance (which may not be available at a certain age).

One of the best reasons to buy term life insurance for the elderly is to provide another layer of protection for the next few years. For example, say you’re in your mid-60s. The life insurance plan you bought in your 30s has expired, but you still have a few years until retirement and your mortgage isn’t paid off yet. A shorter-term life policy can provide a safeguard

Term Life for Special Situations

Not sure if you’re eligible to buy term life? Here’s a closer look at how term life can work for people in special situations.

Term Life for People With Health Issues

Term life insurance is a medically underwritten type of coverage. That means qualifying for term life insurance involves meeting some health requirements and completing a medical exam, in many cases. With Fidelity Life, you have the option of delaying the medical exam by up to six months after buying your plan.

If you’re worried your health could prevent you from qualifying, you may be surprised. As long as your condition is well-managed, it may be possible to buy life insurance with chronic illness . For example, term life insurance for diabetics is often an option as long as they’re keeping up with their treatment and don’t have other health complications. Had a more serious disease, like cancer? Term life insurance for cancer patients may be available once you’ve been in remission for a certain number of years. A life insurance agent can help you explore the best plans based on your medical history.

Term Life for Smokers

Whether you smoke cigarettes, vape, or chew tobacco, it’s possible to buy term life insurance for smokers. Whether you smoke now, have in the past, or plan to quit, you may have options when it comes to life insurance. If you kick the habit and stay smoke-free for at least a year, you can often reapply for lower rates.

Term Life for People in High-Risk Occupations

Work in an industry like law enforcement, mining, or aviation? A high-risk job can play a role in your eligibility for term life insurance. You may have higher premium rates, or you may need to play a flat additional fee for coverage.

What can a term life insurance benefit cover?

Term life insurance provides a death benefit for your beneficiary to use as they want or need, depending on the language of the policy. This may include:

• Day-to-day bills
• Debts
• End-of-life expenses
• Mortgages
• Childcare or dependent expenses
• Long-term care costs or medical expenses (sometimes while you’re still alive)
• Estate plans
• Charity goals

What’s the difference between term and whole life insurance?

Term life insurance and permanent life insurance, which includes whole life, are the two main types of life insurance. They provide different ways to protect your family based on their needs.

Term Life Insurance

lasts for the length of the “term” of the policy, which can range from 10 to 30 years. If you die during that time, your policy provides a cash payout to your beneficiaries. Once the policy term ends, then your coverage ends. Term life is more affordable than whole life, which makes it a good bet for many people and their families.

Whole Life Insurance, or Permanent Life Insurance

lasts your entire life as long as you make payments. This policy can also accrue cash value over time, allowing you to borrow against your policy or cash it out as needed. Those additional features make whole life policies more expensive than term life. It’s often more coverage than people need, but can make sense if you have lifelong financial needs you want to cover.

How does term life insurance work?

Term life is designed to be simple and affordable for everyday families. Here’s how it works:

When You Apply

Choose a plan that works for your situation, including ideal coverage amount and type of term length. Fidelity Life offers a range of options to meet every need.

In some cases, you may need to take a medical exam. At Fidelity Life, we offer coverage on the same day you apply in many cases and give you up to six months to schedule an exam. If you’re healthy, however, we may waive the exam completely.

Once the approval process is complete, the insurance company will set your rate, typically a fixed amount for the life of the policy.

While You’re Covered

Pay your premiums regularly to keep the policy active. It’s important to keep up with payments so your policy’s payout is there when your family needs it.

You’ll also want to review the policy at least once a year to make sure it’s still covering your financial needs. Babies, a bigger house, promotions at work, retirement, and other big life changes can all affect your coverage needs.

After You Die

If you die during your policy’s term, your family will receive the death benefit as a lump sum cash payment to use for daily expenses, pay off debts, build savings, or cover anything else they choose.

If You Outlive the Policy

You have several options if you’re still living when your term policy expires. You can renew the policy in some cases if you want the same type of coverage, buy a completely new policy, or just let your coverage expire if you don’t need it anymore.

How much does term life insurance cost?

Term life is the most affordable kind of protection available. When applying for a policy, keep in mind that there are a variety of factors that influence the amount you’ll pay. Knowing what those are can help you prepare ahead of time and get the best rate possible.

The main factors that affect a policy’s price include:

• Your age. The younger you are, the lower the cost of your policy will generally be, since you’re further away from your life expectancy. This is why it can make sense to buy early when you’re just starting out in life.
• Your health. A history of medical conditions, like diabetes, asthma, and heart disease, all affect your eligibility and the price you pay for insurance – another good reason to consider buying sooner than later. Applying for a longer-term policy while you’re young and healthy is usually the best way to lock in a low premium rate.
• Your lifestyle. Smoking, drinking, and habitual drug use all impact the price you pay. Insurers will also look at your typical hobbies for activities like scuba diving or piloting a plane to determine how risky you are to insure. Higher risk means higher rates.
• Policy type. The more coverage you buy and longer the term length, the more your policy will cost. Policies will also go up every year you get older. At 30 years old, a healthy, employed female can buy a 30-year term policy with up to $500,000 in coverage for just $40 a month. The same policy would cost a 40-year-old around $60 a month – a 33% increase. If you think you’ll need it later, it’s much more affordable to buy now.

How much term life insurance do I need?

Everyone has different coverage needs, so you’ll want to consider your unique situation and budget to determine the right amount for you.

Start by asking yourself the following questions:

• What am I currently paying in day-to-day-expenses and family costs?
• How much are my debts, like a mortgage, student or auto loans, medical bills, and credit card debts, costing me?
• How much would I like to set aside for final expenses and funeral costs?
• What would it cost to help my family maintain their quality of life and meet their financial goals?
• What sort of legacy do I want to leave for my children and grandchildren?

Need help crunching the numbers? Our term life insurance calculator can help you create an estimate tailored to your needs and decide how much coverage you need.

Deciding on term length

Term length refers to how long the policy lasts. The right type of term length for each person will be different and depend on their financial situation and goals.

Available term lengths typically include:

10 Years

10-year term policies offer lower premiums than long-term plans. They can be a good fit for young families trying to pay off student loans or other debt, or older adults looking to cover their remaining mortgage and ensure their partners’ quality of life if they pass away unexpectedly.

15 Years

A 15-year policy offers a range of options for financial protection. With this term plan, you can protect a family with elementary school-aged children, cover a 15-year mortgage, or replace your income in case you die before retirement.

20 Years

With a 20-year policy, you can be assured of longer-term coverage, just in case. Use this plan to help cover you during critical life milestones, like starting and raising a family to adulthood or paying off your first house.

30 Years

Typically the longest term policy available, a 30-year plan offers affordable and flexible coverage at better rates than permanent policies. With decades of protection and fixed premiums, you can have peace of mind knowing you’re covered through all life has to offer, from marriage to retirement and beyond.

Beneficiaries and payout for term life insurance policies

Choosing Beneficiaries for Your Term Life Policy

When you purchase your term life policy, you can designate one or more beneficiaries of the death benefit.

This is typically a spouse or other family member(s). A trust can be set up for minor children if desired (this is a common choice for couples who are separated or divorced, and want their life insurance beneficiaries to be their children without interference from a former spouse).

You can change your beneficiary on your policy if you so choose.

Payouts of death benefits for term life insurance policies

If you pass away, your beneficiary or beneficiaries can claim the death benefit, assuming the policy term is still in force and the policy has not been invalidated. The claim will have to be filed and proof of death submitted. The payout will typically be made between 30 days and six months of the claim being filed.

Example exceptions could include:

• There is suspicion of fraud or misrepresentation, which may delay the payout while the case is investigated.
• The beneficiary is a suspect in the policyholder’s death.
• The policyholder is found to have committed suicide while within an exclusionary period (many term life policies will not pay out the death benefit if the policyholder commits suicide within a certain time frame after the policy is purchased).

Term life insurance riders

You can enhance your policy with various riders to increase the death benefit or protect against inability to pay premiums.

Common riders include:

• Accidental death benefit
• Family accidental death benefit
• Terminal illness
• Child
• Inflation
• Return of premium

Term life insurance from Fidelity Life

A term life policy can give you significant peace of mind. If you have a family, a home loan or other debts, or want to cover lost income if you die, Fidelity Life offers several affordable term life insurance products.

Why buy a term plan from Fidelity Life?

• Many options for every age, stage of life, and financial situation
• Affordable and coverage with term lengths from 10 to 30 years
• Simple application and approval process
• Buy online or over the phone, and even skip the medical exam in many cases

Our term life policies include:

• RAPIDecision® Life may work for individuals between the ages of 18 and 65 looking for coverage amounts between $50,000 and $1 million. Term lengths range from 10-30 years.
• RAPIDecision® Senior Life Term is a policy good for those individuals between 50 to 75 years of age looking for between $10,000 and $150,000, and term lengths between 10 and 30 years.