What is the term of life insurance coverage?

Although many assume that life insurance lasts for life, this is not always the case. In fact, some of the most popular plans last for a set number of years.

The amount of time your policy should last depends on your needs and budget. Buying a permanent plan means you never have to worry about your insurance expiring. Term life insurance costs less but it only lasts for a set number of years.

So how long should life insurance coverage last? While it depends on the type of life insurance you purchase, the guidelines below can help you decide how long your coverage should last.

How do you calculate how long your life insurance should last?

There are many factors to remember when figuring out how long you should keep a life insurance policy. These factors include your total income, outstanding debts, and your dependents.

Although you have many options, most needs are met with either deferred insurance or whole life insurance. Whole life is a type of permanent life insurance, which means that you will never have to worry about your insurance coverage running out.

Term life insurance lasts for a set number of years before it expires. If you die before your term ends, your beneficiary receives a payment. If you survive, your policy will expire, and you’ll need a new one—unless you have renewable life insurance.

Most term plans offer terms ranging from five years to 30 years. How long you must take out life insurance depends on who you want to protect. For example, your term must last at least the life of the mortgage if you have a spouse or partner.

How to determine how much life insurance coverage you need

While knowing how long life insurance policies last is important, you should also know how much life insurance you need.

The easiest way to determine how much coverage you need is to look at your annual income, significant debt, and dependents. If you have children, you should also set aside money for future college expenses.

Of course, if you have questions about how much life insurance you need, you can always ask a representative for help.

Life Insurance Policy Length: The term for the entire life insurance policy

You know how long whole life insurance is, and you know how long life insurance lasts depends on what plan you want. However, there are more things to consider before choosing between full and term insurance.

For example, the cost of whole life is much more than the term. See the table below to get an idea of ​​how much you might pay for permanent or life insurance.

Buying whole life insurance is a much bigger investment than life insurance, but it might be worth it if you never want to worry about what happens when your life insurance ends.

Life insurance lasts for a set period of time

Although term life insurance is affordable, it doesn’t last forever. If you’re worried about what happens after 20 years of paying life insurance, you might want to consider a permanent plan.

Term life insurance costs less than full cost, but the exact amount you’ll pay depends on the length of your policy. Shorter policies have lower rates but expire faster. Check below to get an idea of ​​how much you’ll pay depending on the length of your policy.

Life insurance policies are often renewable, so you can continue the policy after the policy expires. An insurance representative can help you figure out how to renew your life insurance or how to buy term life insurance.

Whole life insurance lasts for the life of the policyholder

Although these plans are permanent, your life insurance can be canceled if you don’t pay each month.

Whole life is the most common permanent policy, but you can also purchase a comprehensive life insurance plan. If you are interested in a permanent plan, you should research the difference between comprehensive and life insurance.

Life insurance policies can expire

Wonder what happens when your life insurance expires? Generally speaking, there are three options when life insurance expires — no coverage, buying a new plan, or renewing your policy.

While you don’t have to worry about life insurance expiring, you may run into trouble if you decide to purchase a new plan. Many life insurance companies limit the age at which you can buy a new policy, usually between 75 and 80.

If you’re wondering how long to keep expired life insurance policies, it’s usually a good idea to renew so you no longer need life insurance.

Life insurance coverage continues as long as the type of policy

How long life insurance lasts depends on the type you buy—whole policies last the rest of your life, while term expires after a set number of years.

Choosing the right type of policy will help you find the most affordable coverage, but there are other ways to save. One of the most important of these factors is finding cheap life insurance companies. Be sure to compare quotes with as many companies as possible to find the best coverage for you, no matter how long you want it.