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If you’re reading this, you probably know what term life insurance is but, like many Americans, you might not be entirely sure how it works.

To help make your research a little easier, we’ve compiled answers to the questions you’ll need to ask when looking for a new policy. But first, let’s take a look at the mechanics of a term life insurance policy.

How Does Term Life Insurance Work: The 30-Second Summary

Term life insurance offers coverage to your family for a specific term, most often in increments of 10-30 years. When your term ends and you stop paying your premiums, your coverage ends. Term life insurance is much more affordable than whole life insurance that covers your entire life.

It’s a good idea to review your coverage at various points in your life—such as marriage, the birth of a child, or the launch of a new business—to ensure that your existing policy still matches your new lifestyle.

Who You Are and How Much You’ll Pay

How much you’ll pay and which insurance products are available to you are based on factors like your age, gender, tobacco use, health, lifestyle, and family history. Not every insurance product is available in every state. That’s simple enough, but it’s important to know that different insurance companies weigh certain predictors of your life expectancy—such as how long you’ve been a smoker or your BMI—differently.

For example, if your medical exam reveals that your BMI is within the range of what most physicians would consider obese, then your premiums may be higher. The same applies for cases in which the policy applicant may have had a history of smoking or substance abuse, or will be participating in high-risk sports during the term of their insurance policy.

That means your term life insurance policy premiums and coverage amounts could vary widely depending on the company you’re dealing with, so be sure to do your research as you begin to comparison shop.

» Compare: Term life insurance quotes

There are over 850 life insurance companies in America, and all these companies are required to include legal language (the stuff you may consider industry jargon) in order to sell policies. We know this can be confusing when you’re trying to sift through and compare policy details online by yourself, and that’s why Quotacy’s tool compares life insurance quotes for you, explaining tricky insurance terms in a way you understand.

When you use our tool to compare term life insurance quotes, you’ll see a range of options from multiple companies that make it easy to find comprehensive and affordable coverage.

You’ll also see that term life insurance premiums are very affordable. For example, a healthy, non-smoking woman in her 40s could get a 20-year term life policy with $500k in coverage to benefit her children for less than $25 a month.

Selecting the Right Coverage

When choosing your policy’s coverage amount, remember to consider your family’s needs and your budget.

Your term life insurance policy benefit can cover your outstanding debts and other end-of-life expenses your loved ones may incur, like funeral and burial costs. Also consider having enough funds remaining to provide for your dependents and/or partner for an extended period, keeping them from financial hardships in the long term.

» Calculate: Life insurance needs calculator

In order to select the right coverage amount, you’ll need to take into account how the cost of living might increase over time.

For example, a single parent with a college-bound teen living in a region with a high cost of living—such as New York—will need more term life insurance coverage than a two-income household with very young children in a rural area. Variables such as college tuition increases, rising healthcare costs, and a volatile housing market may alter your estimate of the value of your assets and change how much your family will need to live comfortably in the future.

It’s important to find a plan that will meet your coverage requirements as your lifestyle and financial plans change. Our life insurance needs calculator allows you to enter a few details about your financial goals and receive an instant estimate of how much life insurance coverage you may need.

Term life insurance is an affordable way to secure your family’s financial future without sacrificing your day-to-day obligations.

Now that you know a little more about what life insurance is, let’s do some myth-busting. Here are some of the biggest misconceptions about life insurance that keep consumers from buying, or even looking for, a new policy.

Myth #1: We’re parents, but not married. We can’t get term life insurance.

According to recent research, about 56% of America’s millennial parents aged 26-31 are unmarried when they have their first child. If you’re among them, you might have heard conflicting information on your family’s ability to become insured.

Let’s put that myth to rest.

Although states across the country may have different rules regarding the rights of married and unmarried parents, term life insurance is available to virtually every type of family, regardless of marital status.

Term life insurance is an affordable way to secure your family’s financial future without sacrificing your day-to-day obligations.

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Myth #2: Same-sex, childless couples can’t get insurance if they aren’t married.

Wrong again.

While you’ll probably have to establish proof of your relationship as a household—as any unmarried couple would—you’ll be able to protect your loved one with a term life policy tailored to your needs just like any other couple.

Myth #3: I’m middle-aged, with adult children. I’m too old for term life insurance.

Surprise! Although you may have millennial children with families of their own, the insurance industry understands the unique needs of Gen Xer and Baby Boomer parents and welcomes them with open arms at any phase of life.

While your premiums will most likely be more than those paid by a 20-year-old, you can find affordable options that will fit your current budget and future financial goals.

Myth #4: I’m not in shape. I used to smoke. I can’t get affordable insurance.

Even if you used to smoke daily—and your abs are more muffin top than Man of Steel—there are still plenty of insurance companies offering term life insurance policies that are both affordable for you and comprehensive enough to provide the financial security you want.

And, if you are still a smoker or have a hobby that underwriters may consider risky, there are options for you to explore. Quotacy works with many different life insurance companies to provide you a range of policies that will match your needs without obligation.

Did you know that some term life insurance policies don’t even require a medical exam? You’ll have to provide some medical information, but the amount will vary according to the insurance company that you work with.

Term life insurance policies are as diverse as the families who need them. Finding the right one in a sea of thousands can feel a little like finding a needle in a haystack. Fortunately, we are here to help. Once you’ve gotten past the myths and are ready to protect your family, we’ll help you find a great company to entrust your family’s security to.

To help you match your personal details like age, lifestyle, and health to the right policy, we’ve created a downloadable insurance buyer’s guide.

Once you’ve answered the questions to your concerns (and put your mind at ease with our mythbusters), Quotacy will help take the guesswork out of finding a term life insurance quote. Our tool is free, transparent, and provides you with multiple quotes in minutes.

So, what are you waiting for?

» Learn more: What You Need to Know About Your Term Life Insurance Policy


About the writer

Quotacy is the country’s leading broker for buying life insurance online. We are obsessed with making it easy for everyone who has loved ones who depend upon them to have life insurance.