How It Works

• You choose the coverage amount and term length.
  
  
• You pay regular premiums (monthly or annually).
  
  
• If you pass away during the term, your beneficiaries receive the death benefit tax-free.
  
  
• If the term ends and you’re still alive, coverage expires (unless you renew or convert).

Advantages

• Low cost – Cheapest way to get a large death benefit.
  
  
• Simple – Easy to understand and budget for.
  
  
• Flexible – You choose term length based on needs (e.g., until kids are grown or mortgage is paid).

Drawbacks

• Temporary – No coverage after the term ends unless renewed.
  
  
• No cash value – No savings or investment component.
  
  
• Renewal after the term ends can be expensive because premiums are based on your new age and health.

Best For

• Income replacement for working years.
  
  
• Covering debts like a mortgage.
  
  
• Protecting dependents until they become financially independent.

Policy Cost

Average Costs by Age (Preferred Nonsmoker, $500K, 20-Year Term):

• 20s: ~$214/year (men); ~$177/year (women)
• 30s: ~$215/year (men); ~$185/year (women)
• 40s: ~$332/year (men); ~$280/year (women)
• 50s: ~$815/year (men); ~$640/year (women)

Monthly Costs by Age & Coverage:

• $250K policy:
• Age 20: Men $22.50/month, Women $21.25/month
• Age 40: Men $70/month, Women $52.50/month
• Age 60: Men $155/month, Women $132.50/month
• $500K policy (via eFinancial averages):
• Age 30: Men $14/month, Women $15/month
• Age 40: Men $18/month, Women $17/month
• Age 50: Men $37/month, Women $41/month

Term Length Impact:
For a healthy 40-year-old:

• 10 year term: ~$203/year (men), ~$178/year (women)
• 20 year term: ~$333/year (men), ~$280/year (women)
• Extending term length significantly raises premiums

Best Age To Buy

• Buying in your 20s or early 30s secures much lower premiums due to better health and longer life expectancy.
  
  
• Major life milestones—like marriage, having children, or buying a home—are prompt triggers for obtaining or increasing coverage.
  
  
• Even in your 40s, 50s, or beyond, getting coverage is still beneficial. Just expect higher costs and potentially stricter underwriting.

Underwriting & Other Pricing Factors

Premiums are influenced by:

• Age (younger = lower risk, cheaper rates).
  
  
• Health status & smoking (smokers and those with health issues pay significantly more).
  
  
• Gender (statistically, women pay less due to longer life expectancy).
  
  
• Coverage amount & term length (higher coverage or longer terms cost more).
  
  
• Term type — Level term has fixed premiums; renewable or decreasing term has different cost structures.
  
  
• Lifestyle, occupation, and family medical history can lead to rating adjustments.
  
  
• Underwriting class (e.g., Preferred Plus vs. Standard) significantly impacts premium affordability.