Key Takeaways
- Term life costs 5-15x less than whole life for the same coverage amount
- 97% of term policies never pay out—but that's actually good (you outlived the need)
- A healthy 30-year-old can get $500K of 20-year term for $25-35/month
Term Life: Simple Protection
Client Question: "What's the cheapest way to get life insurance for my family?"
Term life costs 5-15x less than permanent insurance for the same death benefit. A healthy 30-year-old can get $500,000 of coverage for as little as $25-35 per month.
When Term Makes Sense
| Situation | Why Term Works |
|---|---|
| Young family with mortgage | Affordable way to cover big temporary needs |
| Income replacement years | Protects earning years until retirement |
| Specific debt coverage | Matches loan term (20-year mortgage = 20-year term) |
| Budget-conscious clients | Maximum coverage for lowest premium |
| Temporary obligations | Child support, business loans with end dates |
Common Term Lengths
- 10-year term — Short-term needs, bridge coverage
- 20-year term — Most popular, covers child-raising years
- 30-year term — Maximum length, good for young buyers
Key Conversion Feature
Most term policies allow conversion to permanent insurance without medical underwriting. This is valuable because:
- Health may change over time
- Needs may evolve to want permanent coverage
- Provides flexibility without commitment
Term for the Young Family
A couple wanting maximum coverage on a budget
Setup
A young couple with a new baby wants life insurance but is concerned about cost. They both work and need coverage on both, but budget is tight.
Client says:
“We know we need life insurance now that we have the baby, but we're already stretched thin with daycare costs. We can't afford hundreds of dollars a month. Is there something that gives us good coverage without breaking the bank?”
Practice Objectives
- 1Introduce term as the affordable solution
- 2Explain how term works in simple terms
- 3Help them choose an appropriate term length
- 4Discuss the amount of coverage they need
- 5Mention conversion option as future flexibility
Term vs. "Renting" Objection
Someone who heard term is a "waste of money"
Setup
A prospect has been told that term insurance is "throwing money away" because you get nothing back. They're skeptical of term.
Client says:
“My friend says term life is a waste of money because you pay all those premiums and then you don't get anything back. He says I should get whole life instead because at least I build cash value. Isn't term just throwing money away?”
Practice Objectives
- 1Acknowledge the common perception without dismissing it
- 2Explain what they ARE getting (protection)
- 3Use analogies (car insurance, home insurance)
- 4Discuss the math of term vs. whole life
- 5Let them decide what makes sense for their situation
Choosing Term Length
A client unsure whether to get 20 or 30-year term
Setup
A 35-year-old is trying to decide between a 20-year and 30-year term policy. The 30-year costs more. They're not sure which makes sense.
Client says:
“So a 20-year term would take me to 55, and a 30-year takes me to 65. The 30-year is more expensive, obviously. But I don't know—what if I still need coverage at 56? Should I just get the 30 to be safe?”
Practice Objectives
- 1Explore what they're actually protecting against
- 2Discuss their expected situation at 55 vs. 65
- 3Consider mortgage payoff timing, kids' ages
- 4Discuss conversion option as a backup
- 5Help them make a reasoned decision
A client with a 25-year mortgage asks what term length to get. The best advice is: