Term life insurance provides pure death benefit protection for a set period—10, 20, or 30 years—at the lowest cost of any life insurance type. It is the recommended choice for most families with dependents and debts. Our calculator determines how much coverage you need and estimates premiums based on age, health, and coverage amount.
The DIME method adds up: Debt (total non-mortgage debt), Income (annual income × years dependents need support, typically 10–15), Mortgage balance, and Education costs for children. A simplified rule: 10–12× annual income. Both methods give a reasonable starting point.
Term insurance provides coverage for a set period at a fixed premium—pure protection with no cash value. Whole life (permanent insurance) covers you for life, builds cash value, and costs 5–15× more. Most financial advisors recommend term insurance plus investing the cost difference.
The younger and healthier you are, the lower your premiums. A 30-year-old non-smoker in excellent health can get $500,000 of 20-year term for roughly $25–$35/month. Waiting until 40 can more than double that cost. Buy when you have dependents and debt.
Riders add optional benefits to your policy. Common riders include: accelerated death benefit (access funds if terminally ill), waiver of premium (premiums waived if disabled), child term rider (coverage for children), and return of premium (refunds premiums if you outlive the term, at much higher cost).
Most term policies include a conversion privilege allowing you to convert to permanent insurance without a new medical exam—even if your health has declined. Conversion deadlines vary by policy (often age 65 or the end of a specified conversion period). Check your policy terms.
Match the term to your coverage need. If your youngest child will be independent in 18 years and your mortgage will be paid in 25 years, a 25–30-year term covers you until all obligations are met. Consider when your dependents will be financially independent and when your debt will be paid off.