--- title: What is Term Life Insurance description: Term life insurance offers a time-limited death benefit that can be used to provide financial security for loved ones. image: https://www.eggrs.com/hubfs/Blog%20Feature%20Images/What%20is%20Term%20Life%20Insurance%20%281%29.png --- 4 min read # What is Term Life Insurance [![Picture of EGGRS](https://www.eggrs.com/hubfs/EGGRS%20Logo/EGGRS%20Icon%20Logo.png) EGGRS ](https://www.eggrs.com/blog/author/eggrs) : Apr 17, 2023 12:13:03 PM [Term Life Insurance](https://www.eggrs.com/blog/tag/term-life-insurance) [Death Benefit](https://www.eggrs.com/blog/tag/death-benefit) [Life Insurance](https://www.eggrs.com/blog/tag/life-insurance) [Whole Life Insurance](https://www.eggrs.com/blog/tag/whole-life-insurance) ![What is Term Life Insurance](https://www.eggrs.com/hubfs/Blog%20Feature%20Images/What%20is%20Term%20Life%20Insurance%20%281%29.png) [Term life insuranc](https://www.eggrs.com/term-life-insurance)[e](https://www.eggrs.com/term-life-insurance) offers a time-limited [death benefit](https://www.eggrs.com/blog/how-to-choose-a-beneficiary-for-your-term-insurance-policy) that can be used to provide financial security for loved ones. Did you know that term life insurance was a low cost, low risk policy option for you and you family? In this blog, we will cover just exactly what term life insurance is, how it works, how to define how much life insurance you need and more. 1. [What is term life insurance?](https://www.eggrs.com/blog/what-is-term-life-insurance#what-is-term-life-insurance) 2. [How does term life insurance work?](https://www.eggrs.com/blog/what-is-term-life-insurance#how-does-term-life-insurance-work) 3. [How much term life insurance do I need?](https://www.eggrs.com/blog/what-is-term-life-insurance#how-much-term-life-do-i-need) 4. [Types of Term Life Insurance](https://www.eggrs.com/blog/what-is-term-life-insurance#types) 5. [Benefits of Term Life Insurance](https://www.eggrs.com/blog/what-is-term-life-insurance#benefits) [![Term Life Insurance Pillar Page | EGGRS](https://hubspot-no-cache-na2-prod.s3.amazonaws.com/cta/default/22598335/aa83c4fa-fbe6-4b09-92ef-902a071877aa.png)](https://hubspot-cta-redirect-na2-prod.s3.amazonaws.com/cta/redirect/22598335/aa83c4fa-fbe6-4b09-92ef-902a071877aa) ## What is term life insurance? [Term life insuranc](https://www.eggrs.com/term-life-insurance)e is a type of life insurance policy that has a specified end date in which the [death benefit](https://www.eggrs.com/blog/what-happens-after-you-die-with-term-life-insurance) will only be paid out to its [beneficiaries](https://www.eggrs.com/blog/how-to-choose-a-beneficiary-for-your-term-insurance-policy) if the insured dies during this time period. If the [policy's term](https://www.eggrs.com/blog/how-to-choose-the-owner-of-your-term-insurance-policy) has finished before the insured dies, holders can choose whether they'd like to renew coverage, switch over to permanent protection or let their plan lapse. Term life insurance is the most popular and affordable type of life insurance policy. There are three main types of insurance to consider: **whole life insurance**,** universal life insurance**,** **and** term life insurance**. Click below for more information. - [Term Life Insurance vs Whole Life Insurance](https://www.eggrs.com/blog/term-vs-whole-life-insurance) - [Term Life Insurance vs Universal Life Insurance](https://www.eggrs.com/term-life-insurance/#term-life-insurance-vs-universal-life-insurance) ## How does term life insurance work? A term life policy is an agreement between the insured (the owner of the policy) and an insurance company, agreeing to pay a premium for a specified term length (typically 10, 20 or 30 years). Upon the death of the insured, the insurance company will pay a specific death benefit in cash to the beneficiaries, which is usually tax-free (unless the premiums are paid with pre-tax dollars). How choosing a term life insurance policy works: 1. **Application process** - Before you are given a policy, the insurance provider will assess how much of a risk you are to insure using a “[underwriting](https://www.eggrs.com/blog/the-underwriting-process-for-term-life-insurance)” process. They’ll typically ask for a [medical exam](https://www.dripivco.com/news/drip-iv-helps-with-long-covid-recovery) to evaluate your [health](https://www.dripivco.com/blog/baton-rouge/12-types-of-iv-therapy) (including [oral surgery](https://www.acadianadentalspecialists.com/)), ask about your occupation, lifestyle (learn more about the benefits of healthy lifestyles such as [IV therapy](https://www.dripivco.com/news/joe-rogan-discusses-iv-therapy-and-nad-infusions)), and other things, which can effect your rate. Applying for coverage online takes about 15 minutes, start to finish. [Learn how to Request a Quote from EGGRS](https://www.eggrs.com/blog/how-to-request-an-insurance-quote-from-eggrs)! Or, if you're ready, [Request a quote here](https://www.eggrs.com/request-a-quote)! 2. **Choose a term length** -  The longer the term length, the more you’ll typically pay each month. Because it is generally easier to get insurance while you are younger, it is recommended to get a longer term policy than a shorter one. If you have children, a general rule of thumb is to choose a term long enough to see them out of the house and through college. 3. **Choose a death benefit** - The general rule of thumb is to choose a coverage that is enough to care for your family’s needs if you’re not there to support them. Jump to section: [How to determine how much you need.](https://www.eggrs.com/blog/what-is-term-life-insurance#how-much-term-life-do-i-need) 4. **Choose your beneficiaries** - Your death benefit can go to your spouse, relatives, friends, organizations or charities and doesn’t all have to go to one person. For example, you could give 50% to your spouse and divide the rest between your adult children. ## How to Determine How Much Term Life Insurance You Need Having a life insurance policy with a large enough death benefit in place for your family requires the knowledge of how much it takes to feed, house, [mortgage](https://blog.syomortgage.com/what-are-the-benefits-of-shopping-your-own-mortgage), clothe and educate your children through their adulthood. Below are a few general rules people use to help determine [how much term life insurance you need](https://www.eggrs.com/blog/how-much-term-life-insurance-do-i-need):  - Choose a death benefit that is **10x your salary** - Choose a death benefit that is **10x your salary, plus college expenses** - Use the **DIME formula** (Debt, Income, Mortgage, and Education): Total your debts, mortgage and college expenses, plus your salary for the number of years your family needs protection - Human Life Value: A philosophy which is your lifetime income potential – what you’re earning now, and what you expect to earn in the future. Human Life Value suggests that you multiply your income by a variable based on factors such as age, occupation, projected working years, current benefits, etc. The easiest way to calculate this estimate is to use an online [Human Life Value Calculator](https://www.eggrs.com/calculators/human-life-value). What are insurance rates looking like in 2023? [View 2023 rates here](https://www.eggrs.com/blog/term-life-insurance-rates-in-2023)! [![Human Life Value Calculator | EGGRS Term Life Insurance](https://hubspot-no-cache-na2-prod.s3.amazonaws.com/cta/default/22598335/5afd572f-fbdd-4e34-a85d-04c9aaea465e.png)](https://hubspot-cta-redirect-na2-prod.s3.amazonaws.com/cta/redirect/22598335/5afd572f-fbdd-4e34-a85d-04c9aaea465e) ## Types of Term Life Insurance Below are the types of term life insurance policies. 1. **Level Term or Level-Premium Policy** - offers [rates](https://blog.syomortgage.com/hud-reduces-fha-mortgage-rates) that stay the same for the period of time you choose, even as you get older or as your [health](https://www.dripivco.com/news/joe-rogan-discusses-iv-therapy-and-nad-infusions) changes.  2. Yearly Renewable Term (YRT) Policy - a one-year term life insurance policy where the premium is quoted for a one-year term, starting in the current year. 3. Decreasing Term Policy - a term life policy with a death benefit that gets smaller over time. This could be beneficial to you if you expect the beneficiaries to need less financial support as time passes. 4. **Return of Premium** - this type of term policy pays back all or a portion of your premiums if you live to the end of the term, although your premiums could be 2-4 times higher than with a level term policy. If your financial status changes and you let the policy lapse you may only get a portion of your premiums returned – or nothing at all. 5. **Guaranteed Issue** - These policies are easier to get and don’t require a medical exam. However, the insurance company has to assume that you are a risky prospect, so your premiums may be much higher and may might not pay a full death benefit for the first few years of coverage. 6. Convertible Term Policy - [converting a term life insurance policy](https://www.eggrs.com/blog/converting-a-term-life-insurance-policy) allows you to convert to any permanent policy the insurance company offers with no restrictions. The [conversion rider](https://www.eggrs.com/blog/converting-a-term-life-insurance-policy?hsLang=en) guarantees the right to convert an in-force term policy, or one about to expire, to a permanent plan without going through underwriting or proving insurability.  ## Benefits of Term Life Insurance For parents with young children and growing families, term life insurance is a great option to provide substantial [protection](https://blog.kastnerinsurance.com/the-difference-between-basic-broad-and-special-coverages) for an affordable cost, [creating habits that will change your life](https://www.vested.marketing/learning-center/creating-the-habits-that-will-change-your-life-your-business). Term life insurance provides protection from the unexpected, with coverage often lasting until your children reach adulthood and become self-sufficient (what [successful](https://blog.kastnerinsurance.com/9-things-very-successful-people-do-that-99-percent-of-people-dont) and [wealthy](https://blog.syomortgage.com/why-wealthy-people-refinance-their-mortgages) people are doing). Benefits of term life insurance include: - Lower cost of premiums and more affordable than other life insurance policies - [Reduce stress and achieve your goals](https://www.vested.marketing/learning-center/busy-professionals-reduce-stress-and-achieve-your-goals) - You can invest your money how you want, instead of locking it into a low-return investment - Low risk   ## California Term Life Insurance If you live in California, check out the best rates for term life insurance here. [Our Guide to California Term Life Insurance Online](https://www.eggrs.com/blog/your-guide-to-california-term-life-insurance-online) covers the best rates overall, cheapest for young people, and cheapest life insurance for smokers! ## EGGRS Term Life Insurance [EGGRS](https://www.eggrs.com/) works with only the most highly rated insurers. You can [request a quote online](https://www.eggrs.com/blog/how-to-request-an-insurance-quote-from-eggrs), and instantly receive top rated [quotes for term life insurance](https://www.eggrs.com/blog/how-to-request-an-insurance-quote-from-eggrs). It's quick, it's easy, and mobile friendly! [![New call-to-action](https://hubspot-no-cache-na2-prod.s3.amazonaws.com/cta/default/22598335/d9fefde3-ad25-43e8-88f4-c0474ef43bf1.png)](https://hubspot-cta-redirect-na2-prod.s3.amazonaws.com/cta/redirect/22598335/d9fefde3-ad25-43e8-88f4-c0474ef43bf1) --- [About EGGRS](https://www.eggrs.com/our-purpose) [![EGGRS Full Logo](https://www.eggrs.com/hs-fs/hubfs/EGGRS%20Logo/EGGRS%20Full%20Logo.png?width=100&height=100&name=EGGRS%20Full%20Logo.png)](https://www.eggrs.com)[EGGRS](https://www.eggrs.com/) understands the importance of [preparing for unexpected changes](https://blog.kastnerinsurance.com/the-difference-between-basic-broad-and-special-coverages) while keeping your busy schedule in mind, so we have created an efficient [process](https://www.eggrs.com/our-process) that anyone can follow. Our ideal, uncomplicated process allows you to do everything online, including [requesting life insurance coverage](https://www.eggrs.com/request-a-quote) and receiving it within 20-30 business days. Our services include [term life insurance](https://www.eggrs.com/), [risk differentiating underwriting](https://www.eggrs.com/risk-differentiation-underwriting), [request a quote](https://www.eggrs.com/request-a-quote), and [free calculators](https://www.eggrs.com/calculators). [Contact EGGRS](https://www.eggrs.com/contact) for more information! - [Tweet](https://twitter.com/share) [![Term Life Insurance Rates in 2023](https://www.eggrs.com/hubfs/Blog%20Feature%20Images/Term%20Life%20Insurance%20Rates%202023%20-%20Blog%20Feature%20Images%20-%20EGGRS.png) ](https://www.eggrs.com/blog/term-life-insurance-rates-in-2023) #### [Term Life Insurance Rates in 2023](https://www.eggrs.com/blog/term-life-insurance-rates-in-2023) ![Picture of EGGRS](https://www.eggrs.com/hs-fs/hubfs/EGGRS%20Logo/EGGRS%20Icon%20Logo.png?width=30&name=EGGRS%20Icon%20Logo.png) [EGGRS](https://www.eggrs.com/blog/author/eggrs): Jun 27, 2023 1:08:31 PM Are you considering getting term life insurance to secure your family's future? Not only is it a highly effective solution, but it's also... [Term Life Insurance](https://www.eggrs.com/blog/tag/term-life-insurance) [Life Insurance](https://www.eggrs.com/blog/tag/life-insurance) [Request a Quote](https://www.eggrs.com/blog/tag/request-a-quote) [Rates](https://www.eggrs.com/blog/tag/rates) [Read More](https://www.eggrs.com/blog/term-life-insurance-rates-in-2023) [![What kind of life insurance do I need?](https://www.eggrs.com/hubfs/Blog%20Feature%20Images/What%20kind%20of%20insurance%20do%20I%20need%3F%20Blog%20Feature%20Images%20-%20EGGRS.png) ](https://www.eggrs.com/blog/what-kind-of-life-insurance-do-i-need) #### [What kind of life insurance do I need?](https://www.eggrs.com/blog/what-kind-of-life-insurance-do-i-need) ![Picture of EGGRS](https://www.eggrs.com/hs-fs/hubfs/EGGRS%20Logo/EGGRS%20Icon%20Logo.png?width=30&name=EGGRS%20Icon%20Logo.png) [EGGRS](https://www.eggrs.com/blog/author/eggrs): May 30, 2023 11:23:39 AM It's best to consider the financial dependencies and individual need of your loved ones when shopping for life insurance. Why? Your life insurance... [Term Life Insurance](https://www.eggrs.com/blog/tag/term-life-insurance) [Life Insurance](https://www.eggrs.com/blog/tag/life-insurance) [Read More](https://www.eggrs.com/blog/what-kind-of-life-insurance-do-i-need) [![Term Life Insurance Quotes Online](https://www.eggrs.com/hubfs/Blog%20Feature%20Images/Term%20Life%20Insurance%20Quotes%20Online%20-%20Blog%20Feature%20Images%20-%20EGGRS.gif) ](https://www.eggrs.com/blog/term-life-insurance-quotes-online) #### [Term Life Insurance Quotes Online](https://www.eggrs.com/blog/term-life-insurance-quotes-online) ![Picture of EGGRS](https://www.eggrs.com/hs-fs/hubfs/EGGRS%20Logo/EGGRS%20Icon%20Logo.png?width=30&name=EGGRS%20Icon%20Logo.png) [EGGRS](https://www.eggrs.com/blog/author/eggrs): May 12, 2023 9:29:32 AM If you are a young person, you probably don’t spend a lot of time thinking about life insurance. After all, you are young and healthy, and you have... [Term Life Insurance](https://www.eggrs.com/blog/tag/term-life-insurance) [Life Insurance](https://www.eggrs.com/blog/tag/life-insurance) [Request a Quote](https://www.eggrs.com/blog/tag/request-a-quote) [Read More](https://www.eggrs.com/blog/term-life-insurance-quotes-online) ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "EGGRS", "url" : "https://www.eggrs.com/blog/author/eggrs" }, "dateModified" : "2023-06-27T17:25:45.744Z", "datePublished" : "2023-04-17T16:13:03.000Z", "headline" : "What is Term Life Insurance", "image" : [ "https://www.eggrs.com/hubfs/Blog%20Feature%20Images/What%20is%20Term%20Life%20Insurance%20%281%29.png" ], "mainEntityOfPage" : { "@id" : "https://www.eggrs.com/blog/what-is-term-life-insurance", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://www.eggrs.com/hubfs/EGGRS%20Logo/EGGRS%20Full%20Logo.png" }, "name" : "EGGRS, LLC" } } ``` ```json { "@context" : "https://schema.org", "@type" : "Article", "author" : { "@type" : "Organization", "name" : "EGGRS", "url" : "https://www.eggrs.com/" }, "dateModified" : "2023-04-17", "datePublished" : "2023-04-09", "description" : "Term life insurance offers a time-limited death benefit that can be used to provide financial security for loved ones.", "headline" : "What is Term Life Insurance", "image" : "https://cdn2.hubspot.net/hubfs/22598335/Blog%20Feature%20Images/What%20is%20Term%20Life%20Insurance%20%281%29.png", "mainEntityOfPage" : { "@id" : "https://www.eggrs.com/blog/what-is-term-life-insurance", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://www.eggrs.com/hs-fs/hubfs/EGGRS%20Logo/EGGRS%20Icon%20Logo.png?width=140&name=EGGRS%20Icon%20Logo.png" }, "name" : "EGGRS" } } ```