Term life insurance started as a type of coverage that people bought from year to year. Recently, multi-year policies have appeared, with 20-year policies the most popular. Now, insurers are extending the term to 30 years in many parts of the country.
The 30-year policies have their advantages. They lock in a set annual cost that become gradually more affordable as your income increases. These policies also protect against the danger that your health will deteriorate and make new coverage either exorbitant or impossible to get.
However, long-term policies are not for everyone. Some people lose their jobs, take pay cuts, divorce and as a result, often drop their coverage. That can be particularly costly with 30-year policies because their premiums often run about three times the premiums of 10-year policies.
Thus, a shorter policy might be preferable. You may decide to buy 10 years of coverage with the possibility, at expiration, of buying a new, cheaper policy. To guard against a change in health that makes getting a new policy impossible, buy a 10-year policy that guarantees future coverage, albeit at higher premiums.
