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What is likely the most affordable and least complicated kind of life insurance protection you can get?
The answer is term life insurance. Term life insurance provides coverage for a set period — typically 10, 20, or 30 years — and pays a death benefit to your beneficiaries if you pass away during that term. (Related: A complete guide to understanding life insurance)
But term life insurance doesn’t offer the features various types of permanent insurance, such as whole life or universal life insurance, offer.
For that reason, term insurance tends to cost less, but is less versatile.
Advantages of term life insurance
Still, there are instances where it offers the right solution for the circumstances. These include:
Here's a deeper look at these four examples demonstrating the benefits of term life insurance.
1. Immediate family protection
Sometimes personal responsibilities and obligations aren’t in synch with school schedules or career paths. Perhaps you are starting a family while still in graduate school. Or you are looking after an aging parent while still at the entry-level stage of your career.
Whatever the particular circumstances, you are at a place where protecting your loved ones in case something happens to you is a priority, but the financial wherewithal to do so is limited. Term life insurance can offer an affordable solution.
“A term policy is a fantastic way to cover the major unfunded liabilities families have early in their financial life,” said Douglas Collins, a financial planner with Fortis Lux Financial in New York. “Well-structured term policies should help replace any lost income from any earning spouse, and also help create a source of money to pay for child care if a nonworking spouse were to pass away.”
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In this capacity, a term policy can also act as a kind of “starter” policy. Many term life insurance policies offer a conversion option that allows coverage to shift to a permanent life insurance policy, subject to policy terms and limitations. Because permanent insurance provides lifelong coverage and additional features, premiums are generally higher than for term insurance.
Such conversions may be advantageous as family circumstances change over time.
“Convertible term can allow you to get started, then move on to whole life insurance later as your family grows,” said Jackie Dorsey, a financial professional with Coastal Wealth, a MassMutual firm in Tampa, Florida. “Over time, whole life insurance may also play a role in a broader financial strategy, including retirement planning.”
Term life insurance can also come into play in highly specialized circumstances, perhaps if you have a loved one with special needs or a disability. It may not always be a perfect fit, but might serve as a transition to a more workable solution.
“Perhaps term insurance is not the best fit here, but it may be the only affordable short-term solution,” said J. Todd Gentry, a financial professional with Synergy Wealth Solutions in Chesterfield, Missouri. “In the future, something may happen — perhaps a legal settlement or an inheritance — that affords you the ability to plan longer term and convert that term coverage to a permanent solution to provide for the person with a disability when you are no longer here to do so.”
2. Mortgage
Buying a home is a priority and a milestone for many people.
In fact, over four million homes are sold every year and up to a third of those sales go to first-time buyers, according to statistics garnered by the National Association of Realtors®.1 (Related: Buying your first home)
But the mortgage for buying a home is a big commitment. And for first-time home buyers, getting a mortgage usually involves co-borrowing — where spouses or partners both take responsibility for the loan. Sometimes, first-time buyers also need cosigners — typically relatives who will agree to also take responsibility to repay the mortgage.
How do you make sure your partner or cosigners aren’t saddled with unmanageable mortgage payments if you are no longer around?
“I always recommend term life insurance just for a mortgage,” said Dorsey. “In fact, when I’m talking to young couples, it’s the first thing I ask about. A term policy can be targeted right at that mortgage and help make sure it isn’t likely to become a burden.”
3. Debt obligations
Beyond mortgages, there are other types of debt that could negatively affect your loved ones should you pass away.
Take student loans. Many parents, and even grandparents, cosign for them to help children finance their college education. For example, student loan provider Sallie Mae says about 91 percent of the private undergraduate student loans it issues has a cosigner. And, in many cases, those loans are still due even if the student for whom they were taken out has passed on. (Related: What happens to student loans when you die)
Or business loans, which are often taken out to get money to start a business or buy into an existing enterprise or partnership. Such loans also often involve co-borrowers or cosigners or are secured with personal assets for collateral. (Related: Can your business continue without you?)
“You need to consider term life insurance to protect the loan when you are starting a business,” explained Gentry. “It helps your business partners and your family.”
And other types of debt can have similar treatment.
A term policy aimed at covering such obligations should you pass on unexpectedly could help ease burdens on those left behind.
4. Divorce
Life insurance is often made part of divorce settlements as a way of ensuring that alimony or child support continues even if something happens to a marriage’s main breadwinner. Term life insurance offers protection for the time period that the former partner may be relying on those payments.
“Those support payments, child and/or spousal, will stop if the paying ex-spouse passes away,” Gentry pointed out. “The divorce agreement may require the partner responsible for support payments to get a life insurance policy, at least for the time period of the support payments. That would be term insurance.”
Such protection may also have benefits for the support-paying partner.
“If you are the support-paying parent, recognize that if you are not here, your children will likely suffer financially,” Gentry added. “You are simply protecting the children you love.” (Discover more: 7 situations where a trust may help)
More benefits of term life insurance
These are only four situations where a term life insurance policy may be useful. Obviously, individual circumstances and needs will differ, as will the type of life insurance that may be appropriate for the situation.
Indeed, some people, over time, acquire a variety of term insurance policies aimed at specific debts (like a mortgage) or responsibilities (like a child’s college education) over varying time periods. This “laddering” strategy can be done in conjunction with permanent policies to develop a comprehensive protection strategy.
Such strategies help blend specific coverage needs with an overall protection strategy.
To this end, term insurance may offer an affordable answer in many cases. Unfortunately, many people don’t realize that. According to one study, over half the population thinks a term policy costs three times more than it actually costs.2
And how much does it cost?
A healthy 35-year-old male who doesn’t use tobacco could purchase a $500,000, 20-year term policy from MassMutual for as little as $25 per month.3
Finally, a convertible term life insurance policy may provide flexibility if your insurance needs change over time. For example, you may be a medical or law student and not have much income or many financial obligations today. As your career develops, your financial responsibilities may grow as well. With certain convertible term policies, you may have the option to convert coverage to a permanent life insurance policy during the conversion period, generally without providing additional evidence of insurability. This may be particularly valuable if your health changes in the future.
When shopping for life insurance, the most important thing is to get the coverage you need to fully protect your family. Some people find it useful to consult a financial professional who can help determine how much may be needed based on their obligations and long-term financial goals.
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Frequently Asked Questions about term life insurance
Q. What is term life insurance?
A. Term life insurance provides a death benefit to your beneficiaries for a specific period, such as 10, 20, or 30 years. It tends to cost less than permanent life insurance because it doesn't build cash value or last your entire lifetime.
Q. How much does term life insurance cost?
A. Term life insurance is often far more affordable than people expect — a healthy 35-year-old male nonsmoker could get a $500,000, 20-year policy from MassMutual for as little as $25 per month. Many consumers overestimate the cost by three times or more. (Related: How much does life insurance cost? Less than you think)
Q. When should I buy term life insurance?
A. Term life insurance is commonly purchased during major life milestones — getting married, having children, buying a home, or taking on debt — when others depend on your income. (Related: Do you need life insurance in your 20s?)
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This article was originally published August 2019. It has been updated.
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1 National Association of Realtors®, “Quick Real Estate Statistics,” July 9, 2026.
2 LIMRA, “2026 Life Insurance Barometer,” April 1, 2026.
3MassMutual Term 20 rate as of July 23, 2026, based on a 35-year-old male, Ultra Preferred Non-Tobacco underwriting class. All policies are subject to underwriting approval and premium costs will vary.
