Understanding Term Life Insurance: A Guide for 2025

Life changes like buying a home, having a child, or changing jobs often lead us to reconsider our financial priorities. If you're exploring term life insurance for the first time or thinking about adding to your current coverage, this guide is for you. Term life insurance is a straightforward, affordable way to protect your loved ones financially.

What is Term Life Insurance?

Term life insurance is one of the simplest and most affordable forms of insurance. You select a term length (10, 20, or 30 years) and a coverage amount. If you pass away during the term, your loved ones receive a tax-free payout. It's a great way to ensure financial security for those you care about.

Common Uses for Payout

The payout from a term life policy can cover mortgage payments, funeral costs, living expenses, or college tuition. It's versatile and provides peace of mind knowing your family is covered.

Types of Term Policies

There are several options when it comes to term policies:

• Level Term: Premiums and death benefit remain constant.
• Yearly Renewable Term: Premiums increase with age, but coverage renews annually.
• Decreasing Term: Often used with mortgages; the death benefit decreases over time, but premiums stay the same.

Additional Features

Consider these features when selecting a policy:

• Return-of-Premium Rider: Understand the cost trade-offs involved.
• Convertible Term: Benefit from switching to permanent coverage later, even without a medical exam.

Why Now?

Did you know that 102 million U.S. adults have no or insufficient life insurance? Rates are trending upward, especially for older buyers. Many overestimate costs, with 72% of Americans doing so. Now might be the perfect time to assess your needs.

Reassessing Existing Coverage

Think about expanding your coverage if:

• You've taken on new debt
• Your family responsibilities have increased
• You've lost employer coverage
• You've had a significant income change
• You want to lock in lower premiums while you’re younger

Life is dynamic, and your insurance coverage should be, too. Affordable, effective protection is within reach, and small steps today can bring peace of mind tomorrow. Assess your situation and consider speaking with a licensed insurance advisor to explore term life options tailored to your needs.