How long should your term be?

The method

List every obligation the coverage exists to handle, and write down the year each one ends. The latest year is your answer.

• Mortgage — the payoff year on your amortisation schedule
• Other debt — the year the last of it clears
• Children — the year your youngest is financially independent, including education if you're funding it
• A partner's dependence on your income — the year they'd be self-sufficient, often retirement
• Any support you provide to a parent or sibling

Why short terms cost more

A 15-year term looks cheaper than a 30-year term today. If the need actually runs 28 years, you'll be buying replacement coverage at forty-eight or fifty-five — at an older age, in whatever health you then have.

The lifetime cost of the shorter policy is therefore the premium plus the replacement policy, and the replacement may not be available on good terms at all. That's the real comparison.

What happens when a term ends

Coverage doesn't usually stop dead at the end of the level period. Most term policies allow annual renewal afterwards at rates that increase each year, often steeply enough that almost nobody keeps them.

Treat annual renewal as an emergency bridge, not a plan.

Buying two policies instead of one

Laddering means holding, for example, a longer policy sized to the income-replacement need and a shorter one covering the years of highest obligation.

As the shorter policy ends, coverage steps down in line with a need that has genuinely shrunk. It's more efficient than one large policy running the full distance, at the cost of a little more admin.

The feature that rescues a wrong guess

A conversion privilege lets you move to permanent coverage without proving your health again. It's the hedge against choosing a term that turns out too short, and it has its own expiry date — often long before the term ends.

Find that date when you buy, not when you need it.