Jeffrey Manola is an experienced life insurance agent and the founder of Top Quote Life Insurance. His mission when he created Top Quote Life Insurance was to provide online consumers searching for life insurance with the absolute best quotes for term life insurance, permanent life insurance, no medical exam life insurance, and burial insurance. Not only does he strive to provide you with the ...

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Written by Jeffrey Manola
Founder & Licensed Agent Jeffrey Manola

Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insur...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years Leslie Kasperowicz

UPDATED: Feb 13, 2022

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It’s all about you. We want to help you make the right life insurance coverage choices.

Advertiser Disclosure: We strive to help you make confident life insurance decisions. Comparison shopping should be easy. We are not affiliated with any one life insurance provider and cannot guarantee quotes from any single provider.

Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different life insurance companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about life insurance. Our goal is to be an objective, third-party resource for everything life insurance-related. We update our site regularly, and all content is reviewed by life insurance experts.

Facts You Should Know

  • Direct term life insurance only has value in a guaranteed death benefit
  • Age, gender, occupational habits, and more affect your direct term life insurance rates
  • Companies that sell direct term insurance include State Farm, Guardian Life, Protective Life, and more

Life brings unexpected financial obligations all the time, and your loved ones can be left responsible for them if you are not prepared. Fortunately, investing in a life insurance policy protects your family from bearing the financial burden if something happens to you.

If you are looking for a new life insurance policy or are looking into some of the different coverage options available to you, you have likely come across direct term life insurance.

Direct term life insurance is a popular type of term life insurance sold by most providers and covers you for a set amount of time (usually 10, 15, or 20 years). Because it differs so much from the other types of life insurance, direct term life insurance has perks that other policies do not.

Keep reading to learn more about what direct term life insurance is, how it works, its pros and cons, and how it differs from other popular life insurance policies, like whole life insurance.

Are you looking to compare direct term life insurance rates? Enter your ZIP code to get free direct term life insurance quotes from companies near you today.

What is direct term life insurance?

Also referred to as temporary or just term life insurance, direct term life insurance is what it sounds like. Direct term life insurance works like other life insurance policies, covering your family in the event of your passing. However, the difference is that a direct term life policy only covers you for a set amount of time, and the premiums you pay only go towards your coverage.

Direct term life insurance is life insurance without any bells or whistles. With a direct term life insurance policy, none of the premiums you pay go towards building cash value, and you are guaranteed a stated death benefit if you pass within the set term.

The only value a direct term life insurance policy holds is its guaranteed death benefit. Unlike a permanent life insurance policy, direct term life policies do not feature cash value.

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How does direct term life insurance work?

Any temporary or term life insurance policy is sold in 10, 15, 20, and sometimes up to 30-year terms. Depending on the life insurance company you buy from, you may also have to provide a medical exam to qualify for a direct term life policy.

Some critical factors that life insurance companies consider when deciding on your direct term life insurance rates include:

  • Age
  • Health
  • Gender
  • Hobbies
  • Occupation
  • Family history
  • Driving record
  • Current medications

If you pass away before the end of your set term, your life insurance company will pay your beneficiaries your life insurance policy’s face value as a death benefit. Most of the time, a life insurance death benefit is not taxable and can be used to pay end-of-life costs, consumer or mortgage debt, and more.

What happens if I out-live my direct term life policy?

Once a direct term life insurance policy ends, you have a few options from which you can choose.

First, you have the option to renew the policy for the same or another term. However, renewing a direct term life policy can often get tricky as life insurance companies will recalculate your rates based on your age at the time of renewal.

Therefore, direct term life insurance rates are usually more expensive when you renew them than when you first purchase the policy. It would help if you kept this in mind as you buy a direct term life insurance policy.

Next, you can choose to convert your expiring temporary or direct term life insurance policy into a permanent policy. Plenty of people decide to convert to a permanent policy because of the benefit of extended coverage without going through the underwriting process.

Unfortunately, the only downside to converting your direct term policy to a permanent one is increasing monthly premiums. Permanent life insurance policies are a lot more expensive than temporary life insurance policies because they have many more facets and benefits.

When dealing with an expiring direct term life insurance policy, your last option is to let it expire. As life insurance is not a legal requirement in most states, allowing your term life policy to expire could be helpful if you need to save money.

If you are unsure whether a temporary or direct term life insurance policy is right for you, talk through your options with an insurance agent. An agent helps narrow down your choices to only the best companies and policies for you.

How is direct term life insurance different from other life insurance policies?

A direct term life insurance policy is only meant to cover you for a set amount of time. The time limit sets a temporary or direct life term insurance policy apart from other popular life insurance policies, such as whole life insurance.

Direct term life insurance policies are different from every other life insurance policy. Other policies, such as permanent life insurance, are meant to cover an individual for the entirety of their lifetime. However, there is no expiration date to whole life policies, and there are included benefits, like building cash value, that help customers get more out of their policy.

However, you can choose to include a conversion rider in your direct term life policy. A conversion rider allows you to convert an active or about to expire direct term policy into a permanent policy without going through underwriting or proving insurability.

Because there are so many different life insurance options to choose from, be sure to research multiple companies and policies before landing on one. Talking through all of your options with an insurance agent helps you to know that you are getting the best term life insurance coverage for your needs.

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What are the best direct term life insurance companies?

Almost all life insurance companies sell direct term life insurance. Some of the top companies that sell direct term life insurance policies include:

  • Haven Life Insurance Agency
  • Protective Life Insurance
  • State Farm
  • John Hancock
  • New York Life
  • Northwestern Mutual
  • Guardian Life

Be sure to research your company of interest before deciding on a policy. You may find that the coverage one company offers is not exactly what you need, or there may be a company out there that suits you better.

As a starting point, check out our Haven Life Review for more specific information about the company, including policies, customer reviews, and more.

What are direct term life insurance rates?

Just about every life insurance company sells temporary or direct term life insurance. Because you are only paying for a guaranteed death benefit, you can expect direct term life insurance rates to be significantly less expensive than other life insurance policies.

To better understand what you will pay for a direct term life insurance policy, look through the following table for average term life insurance rates from some of the top companies listed above.

Term Life Insurance Rates from Top Life Insurance Companies for Non-Smoking Men & Women ($250,000/20-year policy)
Life Insurance Company35-Year-Old Men35-Year-Old Women
Guardian Life$26.00$24.00
Haven Life$14.27$12.95
John Hancock$16.86$15.64
Protective Life Insurance$13.69$12.47
State Farm$26.09$22.19
Average$19.38$17.45
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As mentioned above, a few things affect your life insurance rates with any life insurance policy and company. Gender, age, overall health, occupational risks, and more all play a part in determining your direct term life insurance premiums.

The quickest and most successful way to find the cheapest direct term life insurance rates is to compare quotes from multiple life insurance companies. Comparing a few different quotes gives you a better idea of what to expect to pay for life insurance and helps you get the most out of your policy.

Direct Term Life Insurance: The Bottom Line

What is term life insurance? Fundamentally, term life insurance is life insurance coverage with a set expiration date. You pay only for the guaranteed death benefit if you pass within the determined time frame with a direct term life policy.

Direct term life insurance is an excellent option for those who want life insurance coverage without the extra benefits of a permanent life policy. In addition, a direct term life insurance policy is conducive for those working their way out of debt or who don’t have much money to spend on a life insurance policy.

The downside to a direct term life policy is its expiration date. You will pay less for a term life insurance policy than you will for a whole life insurance policy. However, the nature of a direct term life policy is that it will end rather than cover you for your lifetime.

At the end of your direct term life policy, you may choose to renew the policy, convert it to a permanent one, or let it expire altogether. Each option has its pros and cons, but you should keep in mind that your rates will increase as your age determines both at the time.

Many reputable life insurance providers offer direct term life insurance, so comparing at least three will help you know which one has the best policy for you. Looking at multiple companies also helps you find the cheapest life insurance rates. After researching companies, talk with your life insurance agent if you are still unsure.

Ready to start comparing direct term life insurance rates? Enter your ZIP code into our free tool below for instant online life insurance quotes from companies near you today.