The term you select is largely your own personal preference, but should consider the following points:
- The length of any debts you need to cover – how long you will have a mortgage, for instance. You should plan on your survivors paying this off using the proceeds from your policy, so if you have a 20-year mortgage, choose at least a 20-year term.
- Your children’s needs – will your survivors need to support them until they finish university? If your youngest child is 10 now, you may want to plan on supporting them until at least 25, which would mean at least a 15-year term.
- What other coverage do you have? If none, and you think you will always have a basic insurance need, like covering last expenses, taxes owing at death, or the wish to leave a legacy to family members, you may want to consider a term for life, or for as long as possible
- What can you afford? Longer terms cost more. Don’t buy a smaller coverage amount than you need for a long term; rather, buy what you need today for a shorter term to save money, and re-evaluate your needs next year. You may need more or less later on, or have more disposable income that can be used to top-up the insurance coverage you need later.