Life Insurance & Annuities Forum

Jul. 3, 2007

How do I choose which term policy to buy when insurance companies offer 10-, 20-, and 30-year terms?

Alana, North Carolina

Dear Alana,

There is no simple answer to what length of term life insurance you should buy. The length of the term and face value of the policy that is right for your needs is entirely dependent on your financial situation.

Figuring out which term you should buy — 10 years, 20 years, 30 years, or some other number — requires a major review of your debts, financial needs, dependents' needs, and when all these might change. Jack Dolan, spokesperson for the American Council of Life Insurers, suggests that you ask yourself, "When will my dependents reach financial independence?" Also look at major debts, like mortgages or other loans, and at how much money your spouse or dependents would need in order to pay them off if you die.

For more information on term life insurance, please read The basics of term life insurance.

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Disclaimer: We are journalists, not financial planners or insurance brokers. Nothing we say should be interpreted as a recommendation to buy or sell any insurance product, or to provide other financial or legal advice.