Term Life Insurance

Term life covers a set period — commonly ten, twenty, or thirty years. If you die during the term, your beneficiaries receive the death benefit tax-free. If you outlive it, the policy simply ends and nobody is paid. There is no savings component and no cash value.

That simplicity is why it costs so little. A healthy person in their thirties can often buy a substantial death benefit for a monthly premium comparable to a phone bill, because the insurer is pricing a genuinely small probability over a defined window.

It exists to replace income for people who depend on it. The usual approach is to match the term to the years of dependency — until the mortgage is repaid and the children are self-supporting — and to size the benefit against the income and obligations that would need covering. Someone with no dependents and no shared debt generally does not need it at all.

Level term, where the premium is fixed for the whole period, is the version worth buying. Premiums rise steeply with age and can be refused outright after a diagnosis, so locking a long level term while you are young and healthy is the single most valuable timing decision in the product.

Many employers provide a small policy free, typically one or two times salary. It is worth having and rarely sufficient, and it usually disappears when you leave the job — which is why an individually owned policy is the one that actually protects a family.