Term Life Insurance Comparison 2025: Which Policy Term Should You Choose?

Term life insurance (also known as pure life insurance) contains no savings component. It offers higher life protection, lower premiums, and greater flexibility; it is therefore more attractive to young people just entering the workforce and to heads of households with heavy responsibilities. As the family's financial pillar, one may need to buy a home and make mortgage payments while also supporting a spouse and children. If the unexpected happens during this critical period, the family's financial situation and even their previous standard of living could be severely affected. In such cases, term life insurance can serve to "top up" life coverage and provide immediate financial assistance. However, term life insurance comes with different term options suitable for different people — how should consumers choose when taking out a policy?

Generally, when purchasing term life insurance, the available guarantee periods are annual renewal, renewal every 5 years, or renewal every 10 years, and many term life products can be bought online, making them relatively flexible and convenient. In principle, term life insurance premiums rise as the insured gets older, especially in middle age (after 40), when the annual increases become more pronounced, as this is linked to the cost of life-risk.

As shown in Table 1, if you choose annual renewal, in the early years the premium is generally lower than plans that renew every 5 or 10 years, because an annually renewable premium only considers the risk for the coming year. In recent years many insurers, to attract customers, have offered first-year premium discounts; some products offer coverage of up to HK$1,000,000 with a first-year premium of less than HK$200. However, premiums for annually renewable products are adjusted year by year, making it difficult to lock in costs. Still, setting premium factors aside, if a consumer plans to increase life coverage in the short term—for example, considering a spouse’s unemployment or a sudden increase in expenses due to a child studying overseas—they may want to look at annually renewable plans to address potential short-term increases in risk.

If the consumer chooses to renew every 10 years, they can pay a fixed premium during those 10 years, avoiding the risk of premium increases. As shown in Table 2, the 10-year premium averaged out is clearly lower than annual renewal. In other words, term life insurance renewed every 10 years will have higher premiums in the early period of the policy and relatively lower premiums later on.

Term life insurance premiums are mainly influenced by individual and macro factors. Do note that if you choose annual renewal, you will face premium adjustments each year. From an individual perspective, as you get older and nearer to the end of life, premiums become higher. Term life premiums are also affected by macro factors—for example, medical advances that extend average lifespans may create room for price reductions. Conversely, if natural and man-made disasters occur frequently or virus variants become increasingly virulent, posing serious threats to human life, such products may see price increases.

At the same time, prospective applicants should note that if an insurer discontinues a particular term life policy, customers who have already taken out that product will no longer be able to renew it. If consumers switch to other life insurance products, they will need to undergo underwriting again.

By the way, term life generally has fewer exclusions. Even if death occurs under the following circumstances, it is generally covered:
• Suicide
• HIV and AIDS
• Illegal activities
• Drug or alcohol overdose
• Armed forces service
• Nuclear, biological, and chemical incidents
• War and terrorism

However, one point to note: if the policyholder commits suicide within one year of taking out the policy, the insurer will not pay a claim; some products only provide coverage after the policy has been in force for 2 years. In addition, if the policyholder plans to emigrate, they should check with the insurer whether the term life policy will remain in force after moving to the destination country, so as to avoid affecting the final payout due to failing to notify the insurer of changes in personal information. 

Finally, when choosing term life insurance, consumers should select the coverage period according to their personal needs. If facing short-term additional risks or needing a more flexible term and only require short-term coverage, an annually renewable plan may be suitable. Conversely, if planning for longer-term coverage and worried that macro factors may lead to premium increases, consider policies that renew every 5 or 10 years.

Further reading：
[Comparing Whole Life Insurance] Is life insurance not for savings returns? A table showing differences in death benefits
[High-Coverage Whole Life Insurance Comparison] Early death benefits differ by over 250%?

Note：
This article was last updated on October 23, 2025.

This English version of this article has been generated by machine translation powered by AI. It is provided solely for reference purposes. In the event of any discrepancy or inconsistency between this translation and the original Chinese version, the Chinese version shall prevail.