How Long of a Term Should I Purchase?

Dave recommends a 15- or 20-year term. The idea is that during that time, you greatly pay down debt and grow your savings, thereby reducing and eventually eliminating the need for life insurance altogether. It is okay to consider a 30-year term when you are young and starting your family since it allows more time for you to accomplish these goals – as long as the additional cost doesn’t put too much strain on your budget. However, as you get older, the cost difference of a 30-year term increases and does not represent as strong a value. As you get older, a 10-year term will likely work if you have eliminated debt but are still working on growing your savings to make sure your family’s financial lifestyle would not be drastically impacted by your death. The coverage you should carry may vary by what you can currently afford, but Dave recommends 10-12 tines your income. This amount is generally a safe bet, as it will allow your family to keep up their current lifestyle, pay any debts, fund their emergency and savings accounts, etc.

You can also consider “laddering” policies which means purchasing multiple policies to address the different time frames of your personal situation. However, the savings here is usually limited unless you are older or looking at high valued polices. We only offer level term life plans, as recommended by Dave Ramsey.