Life InsuranceFiguring out how long you will need to be insured is the key to determining the right term for your term life insurance policy. If you have children, you should start by estimating when they will be out on their own and no longer in need of your financial support.

So if your children are 3 and 5 now, you might want a policy that covers you at least until the youngest is 22, which you could accomplish with a 20-year term. But this depends somewhat on your age as well. Say you also want to cover your spouse for your lost income until what would be your normal retirement age, 65, and you’re only 35 now. Then you would want a 30-year policy. Keep in mind that insurance gets very expensive as you leave your 50s, so you may pay more to cover yourself until 65, even if you lock in a level-premium, 30-year policy when you are 35. Also, keep in mind that coverage past age 70 or so may be unattainable.

Life insurance, including term life insurance, is not a substitute for a retirement plan. You should plan so that you’ll have enough to live on when you retire, and you won’t have to keep paying insurance premiums. There are exceptions, however. People who start families late in life, for instance, may well have a need for term life insurance beyond the customary retirement age.