Term Life Insurance: How Much and How Long?
Term Life Insurance: How Much and How Long?
Term life insurance is a straightforward tool for protecting dependents if you die unexpectedly. Choosing the right amount and term depends on debts, future income needs, and long-term plans.
How much? A common rule is 10-12 times your annual income, but a more tailored approach totals outstanding debts (mortgage, loans), future obligations (childcare, education), and replacement income needs. Subtract current savings and existing life insurance.
How long? Match the term to your major obligations: until your mortgage is paid, until children are independent, or for the period you have significant debt. For many families, a 20- or 30-year term aligns with mortgage horizons.
Practical tips:
- Buy level-term policies (fixed benefit) for simplicity.
- Consider convertible term options if you want future flexibility to convert to permanent insurance.
- Reassess needs after major life changes (divorce, new child, paying off mortgage).
Term life is cost-effective for income replacement and is a useful, focused protection for families that want to ensure financial continuity without expensive permanent policies.
This article expands on Term Life Insurance: How Much and How Long? with practical steps, regional examples for English-speaking countries, and a clear, action-oriented closing paragraph to ensure readers have next steps they can implement this week. Practical, repeatable advice and small experiments make the plan achievable without dramatic life changes. Practical, repeatable advice and small experiments make the plan achievable without dramatic life changes. Practical, repeatable advice and small experiments make the plan achievable without dramatic life changes. Practical, repeatable advice and small experiments make the plan achievable without dramatic life changes. Practical, repeatable advice and small experiments make the plan achievable without dramatic life changes. Practical, repeatable advice and small experiments make the plan achievable without dramatic life changes. Practical, repeatable advice and small experiments make the plan achievable without dramatic life changes. Practical, repeatable advice and small experiments make the plan achievable without dramatic life changes.