How long does term life insurance last?

Life insurance is one way to ensure your loved ones are cared for no matter what. If you die, your family will continue to have some financial support to rely on. But once you've decided on term life insurance, you face another choice: how long you want that coverage to last. 

Generally, you control your term length. Choosing the right term depends on your circumstances.

Here's what to know about term lengths, cost differences to consider and tips for making the right decision for you.

Term life insurance contracts often last for 10, 15, 20, 25 or 30 years. Some companies may offer terms as short as one year or as long as 40 years, but for most people, term lengths between 10 and 30 years make sense.

A life insurance term is the number of years you're covered under your contract, as long as you keep up with premiums. If you die during your term, your beneficiaries receive a death benefit. But unlike whole life insurance, term life insurance has an expiration date. If you take out a 20-year term contract, your beneficiaries only would receive a death benefit if you passed away during those 20 years. 

Choosing the right term length starts with understanding why you need life insurance and how long your loved ones will rely on your income. Here are the most popular terms and some examples of how they can align with common goals.

You're on track to retire, but you need to work for another five to 10 years to cover current expenses and continue saving.

You just started a new business and plan to take out a 10-year loan to help pay for equipment.

• You have 15 years left on your mortgage.
• Your kids are between five and 10 years old, and you want to make sure they'll be financially supported through college graduation.

• You're about to have a child, and you want to make sure they're financially protected until they're old enough to earn a living.
• One of your parents has been diagnosed with early Alzheimer's and will rely on you to provide caregiving and/or financial support.

• You're a newly married young adult and want to lock in low premiums while you're healthy, even though you're not yet sure whether your future involves kids or a mortgage.
• You're about to buy a home with a 30-year mortgage.

In general, term life insurance can be a cost-effective way to protect your loved ones when you're gone, but premiums vary based on several factors. Your age and health play a big part in your premiums, but so can the death benefit amount and term length you choose. 

Here's how each factor can change your premium amount:

• Age. Coverage is often less expensive when you're younger.
• Health. The healthier you are, the less expensive coverage is likely to be. It doesn't mean you can't get coverage if you have a health condition, though—it just may be more expensive. It can help to shop around because some insurers have better pricing than others for the same health conditions.
• Death benefit. A larger death benefit typically costs more than a smaller one. That said, certain coverage amounts can be cheaper per dollar than others. For example, a $500,000 contract might be only slightly more expensive than a $450,000 contract.
• Term length. Contracts with shorter terms often have lower premiums because it's less likely that the insurer will need to pay the contract's death benefit.

You always can buy a longer term or larger death benefit than you think you might need while being mindful of what these choices mean for your budget. In most cases, you can reduce the death benefit of your term coverage at any point, which will lower your premiums.

If you reach a point where you have enough money saved that it makes sense to self-insure or if you took out your contract to protect against a risk you no longer face, you also can let your contract lapse or expire. 

Switching to a longer term or increasing your coverage later can be more challenging since age and changing health might impact how much coverage you can get. It may be wise to start with higher coverage and adjust it down the road, if needed.

The right term insurance coverage length for you usually comes down to the expenses your loved ones would need to cover in your absence, your personal circumstances and the insurance company's age qualifications. It can be helpful to think about how your needs might shift by life stage.

The younger you are, the longer the term you may want to choose. Since rates are typically lower when you're younger, it can be a good move to lock in lower premiums early. For instance, a 25-year-old couple who hope to buy a home and raise children may want to secure lower rates for the next 20 or 30 years while they're young and healthy.

If you have young children who rely on your income and care, a 20-year contract can help ensure they'll be financially protected until they become legal adults. Even if only one parent is working outside the home, it's important to insure both parents—the homemaking and caretaking parent's work would be a considerable expense to replace.

If your household relies on two incomes to save for the future, maintain a comfortable lifestyle and give to others, you and your spouse might consider two insurance contracts that would last 10 or 20 more years until you retire. If you're a business owner, you might choose a 20-year term contract to protect your business partner or heirs from being forced to sell the company if you die before you retire or sell the business.

If you owe certain forms of debt, consider a contract that covers your repayment timeframe. Perhaps at age 55, you've refinanced a 15-year home loan. A 15-year term contract could provide some reassurance that, if something happened to you before age 70, your debt would be repaid and your loved ones could keep your home. 

Keep in mind that some 30-year contracts may have purchase age limitations with most insurers.

Retirees often don't need term life insurance. They've usually saved enough during their working years to support themselves during their non-working years. However, some retirees still may want term coverage to protect against the loss of a spouse's pension, Social Security or annuity benefits or to protect an older dependent adult, like an aging parent. 

For many insurers, the maximum age to qualify for term insurance is 75. You may be able to purchase a 10-year contract at that age.

You don’t want to put yourself in a situation where you might have to stop paying premiums because your budget is too tight, so consider what you can afford long term. An insurance professional can provide quotes for different term lengths, helping you make an informed choice.

Some term insurance contracts may have an option for renewal or conversion when the term ends. These options can be valuable if you want the flexibility to extend your coverage beyond its initial term.

Without them, the only way to get more term coverage when your term ends is to purchase a new contract. You'll be starting from scratch with your application, which means a new insurability assessment and likely a higher premium. This is also why it's important to revisit your contract periodically. If your needs change, you can refresh your choices at renewal time, cancel what you have and start a new contract or—if you've added on this specific option—consider converting to permanent coverage.

Renewability is a feature specific to term life insurance. Not all insurers offer it, but some do. If your contract has a renewability clause, you'll have the opportunity to re-up your policy for another year, to a maximum age of 95 (maximum age varies by insurer).

Each year that you renew gives you the opportunity to continue your coverage, but once you refuse a renewal, your contract ends and you can't change your mind.

Term-to-permanent conversion allows you to turn part or all of your term life insurance coverage into permanent coverage that can last a lifetime, as long as the premiums are paid. As with renewability, conversion doesn't require underwriting or answering health questions.

Convertibility varies by insurer and by contract. With Thrivent, all term contracts allow conversion within the first five years. If you choose an extended conversion (at an additional cost) when you first get your contract, conversion will be possible until age 70 or until your term expires, whichever happens first.

You might consider renewal or conversion if you realize you still will need life insurance at the end of your term but you don't want to apply for a new contract. The most common reason not to apply for a new contract is that you've developed health issues that would make new coverage costly.

Remember, the coverage that's right for you today might not suit your needs in several years. When choosing your term length, insurer and contract, think about what kind of options you'd like to create for your future self and whether you're willing and able to pay for them today.

It takes courage to confront the idea of your own death, but protecting your family with term life insurance is a responsible, budget-friendly and loving choice. Term contracts typically last for 10 to 30 years, offering financial protection to your family in case you die during the contract term. Additionally, contracts that allow for renewal or conversion can be extended beyond their initial term (at an additional cost).

The right term length for you depends on your responsibilities, goals and circumstances. A Thrivent financial advisor can help you choose the term length and coverage amount that make the most sense for you.