Get Started

How Does Term Life Insurance Work?

Colton Lusk

Term life insurance- What is it and should I have it??

What is Term Life Insurance?

Term life insurance is the more straightforward of your life insurance options. It is a death benefit payable upon your passing to a beneficiary of your choosing for a set timeframe. For example, you can choose a death benefit amount of 1 million dollars to be paid to your spouse if you were to pass away, the term of the policy could be anywhere from 10, 15, 20 or 30 years typically. When this “term” is up, the policy owner has a few options which can also be dependent on which company is providing the insurance… they can renew the term, typically this will end up being at a higher rate, but can potentially be without underwriting. They can sometimes convert the term policy into a permanent life insurance policy that we will cover another day. Or they can simply let the policy lapse. 

Should I have a term life insurance Policy?

Term policies are generally more affordable in terms of premium as compared to other, permanent life insurance options. These policies allow younger people to purchase a large amount of coverage for a minimal monthly cost. If you have children at home a term policy may be a good idea to protect them and your spouse in the event that you pass and are no longer able to provide for them financially. These can also be great policies for more middle-aged couples who are still paying off a mortgage or student loan debt. It gives your spouse peace of mind knowing that in the event of your passing, they will not have to carry the burden of these debts on their own. There are many other situations where term life would be suitable, but these are some great examples to start. 


Jose is a healthy 30 year old who wants to provide protection for his family in case he is to pass away. He calls us and we are able to obtain a term life insurance policy for him. He now has a policy that will provide $1,000,000 to his spouse if he passes away within the next 20 years and it only costs him $35/month! This particular policy can also be easily converted to a permanent life insurance product in the future if he chooses.