When you want to purchase a term life insurance policy, your first questions are how much should you get and how long should it last? The answers depend on the long-term financial obligations you want to protect your beneficiaries from.

What is Term Life Insurance?

Unlike permanent policies, term life insurance ends within a set amount of time: 5, 10, 15, 20, 25 or 30 years. The longer the policy lasts, the more you’re going to pay in monthly premiums. This is because over time you age. With age come health issues, which can sometimes lead to death. When you buy a policy, you’re locking into a premium cost. A shorter term policy is more likely to save the insurer from needing to make a payout on a death benefit.

Why You Need Term Insurance

People typically purchase term life insurance to pay off big-ticket financial obligations so that, in the event of death, the beneficiaries won’t be saddled with the debt. This can be especially useful when a mortgage would need to be paid off or when you want to make sure dependent children be taken care of until they are old enough to take care of themselves financially.

How Long Should Your Term Be?

The two main reasons for purchasing term life insurance—paying off debt and/or providing for dependent children—determine the length of the policy you need.

1. To pay off debt, determine how many years are left in your obligation, a mortgage for example, and set your term limit accordingly.
2. For a policy purchased to protect your dependents, base your term on how many years it will take for your children to become adults and able to support themselves.

Before You Buy

It’s important to have a good understanding of your life insurance needs prior to purchasing a term life insurance policy. Learn more about universal life, whole lifeand term life insurance. Before you buy your term life insurance, determine how many years you want it and for how much. Then get quotes to compare from insurance providers. Finally, buy the policy that fits both your needs and premium cost requirements.