Choosing the Right Term Length

This post helps you figure out how long your term coverage should last based on real-life milestones like your mortgage, kids, and retirement plans.

For families leaning towards term life insurance, a common question is: How long should the term be?

Term policies typically come in durations like 10, 15, 20, 25, or 30 years (and some companies even offer 35 or 40-year terms).

The best term length for you depends on your personal timeline for when your financial obligations will taper off. Here are some tips to figure it out:

• Match to Your Longest Debt or Obligation: One smart approach is to choose a term that covers the length of your biggest debt.

  
  

  For example, if you just took out a 30-year mortgage on a house in Lexington Kentucky, consider a 30-year term policy. That way, if you pass away unexpectedly, the life insurance can cover the remaining mortgage so your family isn’t forced to sell or struggle with payments.

  
  

  Similarly, if you have a personal loan that’ll be paid off in 10 years, at least a 10-year term ensures that debt can be cleared. You want the policy to last at least as long as your major financial obligations.

  
  

• Cover Child-Rearing Years: Think about your kids and dependents. How many years until your youngest child is out of college or financially independent?

  
  

  If you have a newborn, you might want a 25-year policy to cover them until around age 25 (out of college and maybe on their feet). If your kids are 5 and 7, a 20-year term could protect them until their mid-20s.

  
  

  The idea is to have coverage during the years they rely on you financially. Once the kids are grown and self-sufficient, the financial need for a large life insurance policy often decreases (assuming you’ve saved for retirement, paid off debts, etc.).

  
  

• Consider Your Retirement Timeline: A good rule is to have your term last at least until you plan to retire. If you’re 30 now and think you’ll work until 65, a 35-year term would cover your working years. The reason is that by retirement, ideally, you’ve built up savings (401k, etc.) that a surviving spouse could use, and any kids are independent.

  
  

  If you were to pass away after retirement, your spouse might rely on those retirement assets and perhaps a smaller permanent policy if needed. But the big income replacement need is during working years. So, align your term with when you expect to stop earning a paycheck.

  
  

  If you have life insurance through work, keep in mind you usually lose that if you change jobs or retire, so your own term policy covering that period is wise.

  
  

• Budget and Premium Trade-offs: Longer term = higher cost (since the insurer is on the hook longer). A 30-year term costs more than a 20-year term, all else equal. So, balance what you want with what you can comfortably afford in premiums.

  
  

  It’s generally best not to skimp on term length if the need is truly there.

  
  

  For instance, if you need coverage until your toddler is 25, don’t buy a 10-year term just because it’s cheaper – that leaves a big gap when your child is 11-25. You’d likely end up having to buy another policy later, at older age and higher cost. In fact, buying a slightly longer term than you think you need can be financially smarter than a shorter one that might expire too soon. This avoids the scenario of having to purchase a new policy in your 50s or 60s at much higher rates.

  
  

• “Laddering” Strategy (advanced tip): Some families use a layering strategy with multiple term policies.

  
  

  For example, you might get a 30-year term for a large amount that covers your mortgage and general income replacement, and also a 20-year term for an additional amount to cover your kids’ college years.

  
  

  In 20 years, when the kids are grown, the extra policy expires (saving you money), but you still have the 30-year policy for the mortgage and your income until retirement. Laddering can save money because you’re not paying for more coverage than you need at any given time. This approach can be tailored with the help of an agent. It’s not necessary for everyone, but it’s a neat way to optimize coverage if you have multiple big milestones.

Now you have the basics to get started.

In the end, choosing the term length is about projecting into the future: How long will your family need you financially? If the answer is “until the house is paid” or “until the kids are done with college” or “until I retire,” use that as your guide. And remember, you can often renew or convert term policies later on, but it will be more expensive at an older age. So it’s usually better to get it right from the start and lock in a premium rate early in life.

If you’re unsure, err on the side of a longer term. I’m happy to discuss your situation and help you choose a term that makes sense.

Contact me today to set up a time to talk.

Ready to Protect Your Family? Let’s Talk!

Feeling a bit overwhelmed by the choices?

That’s completely normal.

This is where I come in as a resource and partner for you.

My role as a Kentucky-based insurance professional is to make this simple and personal. I’ve worked with young families, as well as being apart of one myself, and I understand the common priorities – protecting your home, making sure the kids are provided for, staying on budget, and not getting drowned in insurance mumbo-jumbo.

Contact me and we can start with a friendly chat, no pressure, no obligation. Ask me anything – even if you just want to sanity-check how much coverage you need, or you’re curious what a policy might cost. I’m here to help you understand and to make this process as easy as possible.

Life is full of uncertainties, but with the right life insurance in place, you can enjoy today knowing your family is protected for tomorrow. So let’s find the right term, whole, or universal life policy for your Kentucky family, and secure that peace of mind. I’m just an email or a click away, ready to guide you every step of the way.

CMS Disclosure:

This article is intended solely for educational and informational purposes. It is not connected with or endorsed by the U.S. government, the Centers for Medicare & Medicaid Services (CMS), or any federal Medicare or Medicaid program. Insurance product availability, benefits, and rates may vary by state, carrier, and individual circumstances. For personalized advice tailored to your specific situation and compliance with Kentucky insurance guidelines, please contact a licensed insurance agent directly. Joshua Moon is a licensed life and health insurance agent in Kentucky.