Purchasing Term for Life (Permanent Term Insurance)

Last Updated: April 6, 2019

Term life insurance is one of the most popular forms of life insurance on the market today. It doesn’t require any investing, and provides affordable protection with level premiums for a fixed number of years.

The major downside to term insurance is that it is not designed to be permanent coverage, and most people outlive their policy. For this reason, term insurance great for younger people who need a lot of coverage, but it’s not always the best fit for people who need life insurance over age 60.

To give you the best of both worlds, some insurers started offering a hybrid of term and permanent life insurance known as “term for life.” In this article, we’ve briefly explained the differences between traditional term and permanent term insurance, and we’ve included some sample rates.

Quick Article Guide:

  1. What is Traditional Term Life Insurance?
  2. What is Whole Life Insurance?
  3. What is Term for Life and How Does it Work?
  4. Layering Permanent Coverage with Term Insurance
  5. Term Life Insurance Cost – Sample Rates
  6. How Much Term for Life or Lifetime Coverage Can I Qualify for?
  7. How Do I Apply for Coverage?

What is Term Life Insurance?

Traditional term life insurance offers a guaranteed death benefit and level premiums for a fixed number of years. There are no investment risks, you are paying for pure protection that does not build cash value. The most common terms available are 10, 15, 20, 25, and 30 years, but with a few companies like AIG, a 35-year term may be available.

Term policies are ideal for young families who need to insure the breadwinner’s income due to their affordability, but keep in mind, most people outlive their policy, so they’re a good fit for someone who wants to leave money behind. In addition, our options for longer terms become limited as we age, with most traditional term policies expiring no later than age 89.

For example, after age 64, a 25-year term is no longer available, and after age 67, most companies stop offering a 20-year term. If you’re age 58 or younger, a 30-year term is still available, but unless your policy offers a conversion option, you’ll likely outlive it. For this reason, some of our clients want to avoid a traditional term policy.

What is Whole Life Insurance?

The only type of life insurance that is more popular than term insurance is whole life insurance. Whole life insurance comes in all shapes and sizes, including “Guaranteed Acceptance” insurance, which offers a death benefit of up to $25,000 with no questions asked. Most of the policies you see advertisements for on TV are some form of whole life insurance.

Whole life insurance usually offers a death benefit of up to $50,000, and your coverage is usually guaranteed to age 100, but some policies have increasing rates that double every five years. In addition, whole life insurance is very pricey for non-smokers and healthier applicants because no medical exam is required for an approval, and everyone is charged the same average rate based on the age and gender.

While whole life insurance offers coverage that’s designed to be permanent, and they are easy to purchase, for most people who want to leave money behind, they don’t offer enough coverage.

What is Term for Life and How Does it Work?

Estate planningTerm for life takes the best elements of whole life insurance and term life insurance to combine them into one product. Like traditional term insurance, term for life is more affordable than whole life insurance, and it offers larger coverage amounts which makes it ideal for estate planning, leaving an inheritance, protecting a spouse, settling final expenses, or maximizing a pension.

Term for life is also known as guaranteed universal life insurance, which shouldn’t be confused with the non-guaranteed universal life insurance that was popular in the 1980’s. Guaranteed universal life insurance does not require any risky investing, and it offers fixed rates and guaranteed coverage until the age of 90, 95, 100, 105, 110, or 120.

If you’re in your 60s and you’re considering your options for term insurance, a term or GUL to age 90 may even provide you with a longer period of protection for a lower cost. If you’re younger, locking in permanent coverage may only cost you a few more dollars each month than a 30-year term. You may also want to consider layering both types of coverage.

Layering Permanent Coverage with Term Insurance

If you’re like some of the clients we work with, you might need permanent life insurance and term insurance. In fact, it’s very common for someone to own more than one life insurance policy, especially if their need for coverage will change as they get older and surpass major life events. The life insurance company only looks at the total amount of coverage on your life, not the number of policies.

For example, let’s say you want to leave an inheritance behind to your children, but you also want to make sure your family has the money they need to settle the mortgage if you pass away unexpectedly before its paid off. In this situation, it will save you a considerable amount of money to purchase two policies now instead of waiting until you are older.

To ensure that both life goals are funded, purchase a traditional term policy with a term that is equivalent to the remaining years on your mortgage, and a permanent life insurance policy for the inheritance you wish to leave. If you wait until your term expires in 20 or 30 years, the cost of your lifetime policy will be at least three to five times more expensive, even if you are still in the same health.

Term Life Insurance Cost – Sample Rates

Term life insurance is the most affordable coverage on the market, especially when compared to and equivalent whole life policy. To help you compare the cost of traditional 30-year term to whole life and term for life (to age 90), we’ve included some sample rates by age for $100,000 of coverage for a male and female in excellent health.

Cost of Term for Life vs. 30-Year Level Term – Female

Current Age30-Year TermLifetime Term (GUL)Whole Life

*Displayed monthly rates are accurate as of 08/01/2018 and are provided for illustrative purposes only. 

Cost of Term for Life vs. 30-Year Level Term – Male

Current Age30-Year TermLifetime Term (GUL)Whole Life

*Displayed monthly rates are accurate as of 08/01/2018 and are provided for illustrative purposes only. 

If you would like to learn more about your options for affordable life insurance, or if you would like an accurate quote based on your age and health profile, please give us a call today to speak with one of our experts, toll-free at 855-247-9555.

How Much Term for Life or Lifetime Coverage Can I Qualify For?

Qualifying for term for life/GUL is just like qualifying for a traditional 10, 20, or 30-year term policy. The life insurance company you apply with will evaluate your current age and income to determine the amount of coverage you can qualify for. In general, younger applicants have more “working years” so they qualify for a higher income multiplier.

We included a sample income multiplying table from one of our carriers below. Please keep in mind, if you cannot qualify for the coverage you need based on your earned income, some companies will also consider your net worth and need for the coverage. If you need to fund a trust or leave an inheritance, you can also purchase coverage on your spouse.

Income Multiplier for Applicants who Are Working Full-Time

Current AgeIncome Multiplier
30-3930 to 35x Gross Annual Income
40-4920 to 25x Gross Annual Income
50-5915 to 20x Gross Annual Income
60-6910 to 15x Gross Annual Income
70-755 to 10x Gross Annual Income

*Income multipliers vary by company and some companies offer larger multipliers than others.

If you need help determining how much coverage you can qualify for, please see our article, “Life Insurance for Income Replacement,” or give us a call to speak with one of our expert agents. We’ve helped thousands of families and businesses with their insurance needs, and we can help you secure an affordable life insurance policy too.

How Do I Apply for a Life Insurance Policy?

tla can help

Applying for life insurance is as simple as picking up the phone and giving us a call. Our agents offer multiple years of experience and we represent 63 top-rated life insurance companies. With a few questions about your health and lifestyle, we can quickly match you with the best company, even if you have some health issues.

We offer traditional term, term for life, whole life insurance, and life insurance without a medical exam. In just a few moments, we can help you compare your available options and provide you with accurate rates for your least expensive options.

Most importantly, there is no cost to apply for insurance, and our impartial shopping services are completely free. Give us a call today, toll-free at 855-247-9555, or you can request a free instant online quote below to instantly compare rates from dozens of insurers.

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