Term life insurance

Term insurance is a pay-as-you-go life insurance option that covers a specific amount of time, typically 20 years or less. It can be an important financial tool in your younger years, when you have kids and are balancing saving for retirement or paying off debt. In the event of your unexpected death, term life could pay off your mortgage, student loans or other debt as well as cover ongoing and future needs for your family, like education costs.

What you get from term life insurance

Term life insurance benefits are paid to your beneficiaries free of federal income taxes if you pass during the coverage period. Once the term ends, coverage ends – unless you purchase a new policy or renew your current one.

The benefit of term life insurance comes with is the relatively low cost when compared to other types of life insurance. You can also choose a term length that fits your needs, then decide on the best course of action after the coverage ends.

What you can expect to pay

Term life insurance premiums are based on your age and health. The younger and healthier you are, the lower your premiums can be. Coverage for a healthy 30-year-old costs an average of just $14 a month, or $160 a year.* That's an amount that can easily fit into most family budgets.

Term life insurance vs. whole life insurance

Term life insurance and whole life insurance are two common life insurance options, though they have their differences.

While term life insurance provides coverage for a specified period, whole life insurance is a type of permanent insurance policy because it can provide a death benefit for the insured's lifetime. Because of the death benefit and cash value guarantees, whole life insurance typically has higher premium requirements. The choice between term and whole life insurance depends on your individual financial goals, budget, and how long you want the coverage to last. Consider talking to a financial advisor to learn more about different life insurance options.

Types of term life insurance

Every insurance agency chooses which types of term life insurance they offer, if they decide to offer term life insurance at all. While specifics can vary from company to company, these are the main types of term life insurance.

Renewable Term Life Insurance:

Renewable term life insurance lets you renew coverage for another term without needing a medical examination or evidence of insurability. The renewal typically occurs at the end of each term, and you need to renew by the policy's end date to retain coverage. With renewable term life insurance, you pay premiums based on your age at the time of renewal, which means premiums can increase as you get older.

Convertible Term Life Insurance:

Convertible term life insurance lets you convert the term policy into a permanent life insurance policy without the need for review. This conversion can provide flexibility to adapt the policy to changing financial needs or goals, including a transition to lifelong coverage.

Decreasing Term Life:

In a decreasing term life insurance policy, the death benefit decreases over time, but monthly premiums also decrease over time. If you anticipate fewer financial obligations as you get older, then decreasing life insurance could be a good fit.

How much term life insurance do you need?

An easy way to determine how much life insurance you need is to use L-I-F-E to calculate your liabilities, income, final expenses and education expenses. See the example below.

Life insurance amount needed: $500,000

Our life insurance calculator can help you calculate these needs.

Why term life from Edward Jones

Everyone's needs are different, which is why it's important to talk to someone who can look at your entire financial picture and savings goals, and help you figure out what's best for your situation. From term life to permanent insurance options, we offer a variety of plans that cover you now and in the future.