How Long Should a Life Insurance Policy Last?

Life insurance can be a helpful way of providing financial support to your loved ones in the event of your death. Once you begin to think about buying a policy, the usual questions pop up, such as ‘How much cover do I need?’ and ‘What type of cover should I choose?’. But what about how long you need cover for?

Different families have different needs, so how long you need cover will depend on a range of factors. In this article, we’ll look at some of the reasons that can affect the length of your policy.

How does life insurance work?

If you’re not familiar with how life insurance works, here’s a quick rundown:

Before you take out a policy, you decide how much cover you want the policy to pay out when you die and how long it will last.
Once the policy is active, you pay a premium (either monthly or annually) to your insurer to remain covered.
If you die during the policy, your insurer will pay out the agreed sum to chosen beneficiaries (i.e., family, spouses, children, friends, etc.).
They can then use this money where needed, whether that is to cover your funeral costs or as a gift.

Why do you need life insurance?

Without a life insurance policy, your loved one’s may face financial difficulties in the event of your unexpected passing. While it’s never nice to think about what might happen if you suddenly die, we all have to plan for the worse just as much as we prepare for the better.

You may need life insurance if you have:

Dependents who rely on your income (partner, spouse, children, etc.)
Debts or loans that would burden your loved ones
Mortgage payments that need to be covered
Funeral expenses that could otherwise strain family finances
Future financial goals, such as education for children
No savings or investments set aside to support your loved ones after you’re gone.

Some families may need more cover than others, though as a general rule of thumb, you should aim for at least x10 your annual salary. If you have a large family or significant debts, a higher cover amount may be necessary.

How long should I be covered for?

In most circumstances, the length of your life insurance policy can be defined in two ways:

You’re looking to provide financial protection for your family for the long term, including any current or future costs that may arise
You’re looking for protection in a certain timeframe, such as to cover a mortgage or your family until your children have grown.

For general protection with the long term in mind, whole life insurance is often recommended, as it provides cover for your entire life as long as the premiums are paid. This type of policy can be beneficial if you want to ensure that your family receives a payout regardless of when you pass away, which can help cover ongoing expenses or leave a legacy.

On the other hand, if you wish to provide support for a specific period, term life insurance may be more suitable. With this type of policy, you choose the length of the policy in x amount of years (known as the ‘policy term’).

If you pass away during the term, the policy will pay out the agreed sum to your loved ones. However, if you survive the term, your cover will expire, and you will need to take out a new policy if you still wish to own cover. Depending on the insurer, you may be able to extend the policy.

Ultimately it will depend on your own circumstances, which is why you should carefully consider your specific needs and financial situation beforehand. For example, if you want permanent cover with no specific timeframe then a whole life policy may be suitable. Whereas if you wish to be covered for a certain amount of time, then term life insurance may be your preferred option.

When should I take out cover?

There’s a common misconception that you don’t need life insurance until it’s deemed necessary, such as when you have a family or significant debts. However, it can be beneficial to take out a policy sooner rather than later for a number of reasons.

For starters, life insurance costs usually depend on your age and health. For most people, buying a policy in their 20s will result in a considerably lower premium than if they bought cover in their 40s. In addition, policies like whole life insurance typically have fixed premiums where your monthly payment remains the same throughout the policy.

With all this in mind, it may be worth buying cover early whilst premiums are cheaper. Even if you don’t have dependents at this stage, it could come in handy in the future saving you both time and money.

How much does life insurance cost?

As mentioned, age and health are two of the biggest factors insurers use to determine your premiums for life insurance. However, there are other factors too, such as:

The amount of cover required — a higher cover amount will result in higher premiums.
The type of policy — whole life insurance tends to be more expensive than term life insurance as there is no expiry date.
The length of the policy — the longer your policy, the more it will cost over time.
Your lifestyle — How much you drink alcohol or whether you smoke can also affect your premiums.
Your occupation — occupations deemed high risk may lead to higher premiums due to the increased likelihood of claims.

If you think you’re ready to take out life insurance it’s worth speaking to an adviser or broker who can help guide you through your options and find the right cover for your needs.

This post may contain affiliate links. Financial Panther has partnered with AwardWallet and CardRatings for our coverage of credit card products. Financial Panther, AwardWallet, and CardRatings may receive a commission from card issuers. Some or all of the card offers that appear on the website are from advertisers. Compensation may impact on how and where card products appear on the site. The site does not include all card companies, or all available card offers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.

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Troxus Explorer Step-Thru Ebike – The Troxus Explorer Step-Thru is a fat-tire ebike that I’ve had the pleasure of riding for a while now. It has amazing power, great looks, and awesome range. If you’re looking for a great fat-tire ebike that offers a lot for the price, the Troxus Explorer Step-Thru is definitely one for you to consider. Check out my Troxus Explorer Step-Thru Review.
Hovsco HovBeta Ebike – The HovBeta is a folding ebike with great specs and a lot of interesting features, and importantly, it’s sold at a good price point. I’ve had a blast commuting with it and using it to do deliveries with DoorDash, Uber Eats, and Grubhub. Check out my Hovsco HovBeta Ebike Review.
Vanpowers Manidae Ebike – The Vanpowers Manidae is a fat tire ebike that I’ve been riding as my primary winter commuting bike and have also been using it to do food delivery with apps like DoorDash, Uber Eats, and Grubhub. After clocking in a decent number of miles with this ebike, I wanted to write a post sharing what my experience with the Vanpowers Manidae ebike has been like. Check out my Vanpowers Manidae Review.
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Himiway Escape Ebike – The Himiway Escape is an interesting bike for anyone looking for a moped-style ebike. If you’re a gig economy worker, the Himiway Escape is particularly interesting and it’s possible to think of it as an investment, especially if you can opt to do deliveries with the Himiway versus using a car. It’s not cheap, but you can definitely make your money back when you compare the mileage you’ll put on your car versus using an ebike. Check out my Himiway Escape Bike Review.
Espin Sport Ebike – The Espin Sport is a good ebike for someone who is looking for an ebike that feels and rides more like a regular bike. There are many ebikes that are really only bikes in name. In reality, they’re basically electric mopeds. The Espin Sport, by contrast, is a bike you could probably ride without the battery and you’d feel like you’re just riding a regular bike. Check out my Espin Sport Review.
Varla Eagle One Scooter – The Varla Eagle One is an excellent scooter that can make sense for a lot of people. It can work as a primary mode of transportation. You can use it to work on gig economy apps like DoorDash, Uber Eats, and Grubhub. And it can also be a recreational vehicle if you’d prefer to use it for that. Check out my Varla Eagle One Review.
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For additional investing app bonuses, be sure to check out the ones below:

M1 Finance ($100) – This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $100 for opening an account. Check out my M1 Finance Referral Bonus – Step-By-Step Guide.
SoFi Invest ($25) – SoFi Invest is an easy brokerage account bonus that you can earn with just a few minutes of work. Use my SoFi Invest referral link, fund your SoFi Invest brokerage account with just $10 and you’ll get $25 of free stock. I also have a step-by-step guide for the SoFi Invest referral bonus.
Webull (20 free stock shares) – Webull's current promotion gives you 20 free shares valued between $3-$3,000 each if you open an account using my referral link. Here’s a guide I wrote about how to earn your free shares using Webull.
Moomoo (15 free stocks) – Moomoo is a free investing app currently offering 2 different referral bonuses if you open an account using a referral link. Read my Moomoo referral bonus guide for more information.
Robinhood (1 free stock) – Robinhood gives you a free stock valued between $2.50-$225 if you open an account using my referral link.
Public (1 free stock) - Public gives you a free stock valued between $3-$70 if you open an account using my referral link.

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If you’re looking for more easy bank bonuses, check out the below options. These bonuses are all easy to earn and have no fees or minimum balance requirements to worry about.

Upgrade ($200) – Upgrade is a free checking account that’s currently offering a $200 referral bonus if you open an account and complete a direct deposit. These bonus terms are easy to meet, so it’s well worth doing this bonus as soon as you can. Here’s a post I wrote with more details: Upgrade $200 Referral Bonus – Step By Step Directions.
Ally Bank ($100) – Of all the banks out there, Ally is, without a doubt, my favorite. At the moment, Ally is offering $100 to customers who open an eligible Ally account and meet the requirements. Here are the step-by-step directions to earn your Ally Bank referral bonus.
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GO2Bank ($50) - GO2Bank is an easy bank bonus that I recommend people take advantage of if they have an easy way of meeting the direct deposit requirement. I like that it’s easy to open the account and that the bonus pays out quickly. Check out my step-by-step guide on how to earn your GO2Bank $50 referral bonus.
Current ($50) – Current is a free fintech bank that’s offering new users a $50 referral bonus after signing up for an account using a referral link. Current is an easy bonus to earn and also gives you access to three savings accounts that pay you 4% interest on up to $2,000. That means you can put away up to $6,000 earning 4% interest. That’s very good and makes Current an account I recommend to everyone. Check out my step-by-step guide on how to earn your Current Bank bonus.
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Kevin is an attorney and the blogger behind Financial Panther, a blog about personal finance, travel hacking, and side hustling using the gig economy. He paid off $87,000 worth of student loans in just 2.5 years by choosing not to live like a big shot lawyer.

Kevin is passionate about earning money using the gig economy and you can see all the ways he makes extra income every month in his side hustle reports.

Kevin is also big on using the latest fintech apps to improve his finances. Some of Kevin's favorite fintech apps include:

SoFi Money. A really good checking account with absolutely no fees. You'll get a $25 referral bonus if you open a SoFi Money account with a referral link, and an additional $300 if you complete a direct deposit.
5% Savings Accounts. I'm currently getting 5.24% interest on my savings through a company called Raisin. Opening a Raisin account takes minutes to complete, it's free, and all of your funds are FDIC-insured. I explain how it works, why I'm now using it to store my emergency fund and any other cash savings I have, and why I recommend everyone check it out in this review.
US Bank Business. US Bank is currently offering new business customers a $900 signup bonus after opening a new account and meeting certain requirements.
M1 Finance. This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $100 for opening an account.
Empower. One of best free apps you can use to monitor your portfolio and track your net worth. This is one of the apps I use to track my financial accounts.

Feel free to send Kevin a message here.