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Now, we're entering the longer lengths of term life...20 year term life insurance. Quite different from 5, 10, or even 15 year, 20 year is more of what people think of when looking at addressing the traditional needs of life insurance. 20 years is long enough a period to address most issues while keeping the cost down from 30 years. Let's look at 20 year term life insurance.
20 years is one of the most popular lengths of term life selected on the market for good reason. 5 and 10 are usually used to address specific needs or windows such as 5 year loan, a new business venture, a 5 to 10 year contract, or any other financial responsibility that is short term in nature. The traditional need for life insurance is to replace income due to the loss of a person who earns income or is financially responsible for dependents. For a younger family, this usually involves a very large period of time. With young children or a new house, you are looking of at least 15-20 years. We will speak with clients and their two typical requests are to get their children past college (which is increasingly expensive) and pay off the family house. This is actually a pretty practical consideration and good strategy. Our term life insurance planner will help address the amount and ultimately our quoting engine will allow you to double check the affordability of the term length. Let's talk a little more about affordability.
20 years intuitively feels like round number to most people and it's a popular length of term offered my most life insurance companies. 15 years can cut some long term needs short and 30 years might be too expensive for your budget. Ultimately, you have to be able to afford the coverage even during down times when money can get tough. If 30 years of coverage is going to stretch your budget than that overrides the apparent benefit of that length of term and points directly to 20 years. It's more important to have 20 years of coverage you can afford than 30 years of coverage that will lapse after 5. With life insurance, you need to be protected but you also need to be practical. If you give most life insurance brokers a chance, he/she might sign you for all types of coverage but you are the one that has to pay the premium. This is why you do not get the hard sell from us. 30 years is usually the longest period of time and for good reason...who knows what your needs will be after 30 years. 20 tends to be a practical way to attain long term life insurance but at a lower cost than 30 years.
We recommend running your instant term life insurance quote and comparing the 20 year with both the 15 and 30. If there's a big price jump either way, definitely take that into account especially if it allows you to obtain an adequate amount of coverage. If you are looking to address common long term needs, we recommend starting the quoting process with 20 year to establish a base rate.
One of the first big considerations you will hit when comparing term life insurance plans and rates is the length of coverage that is needed (and affordable). The range can be from 5 to 30 years for most carriers but this choice has pretty big implications later on during the policy. 15 year life is traditionally a popular choice for a few reasons and uses so let's take a closer look.
With a range of 5 to 30 years for most term life policies, 15 fall right in the "goldilocks" range...not too short and not too long (loosely translated as expensive). 5 and 10 year policies are so short that they tend to work well for specific issues or financial responsibilities you are insuring against. For example, you have 10 years left on your mortgage or you want to insure the principles in a new business venture during the first 5 year start up phase. 15 years is a little different. 15 year term life is more of what you think of when shopping for term life insurance in the first place. It's to protect your family from the big "what if" for all the different financial reasons that life insurance needs to address.
15 year term length is long enough to really cover a good range of a person's earning life depending on when they purchase it. For example, most people start to think of getting life insurance when they start a family or enter into a mortgage. Actually, most people put off life insurance (rolling the dice) a few years after and then finally decide they can't take the risk any longer. This most likely is the result of seeing friends, coworkers or loved ones who had the unimaginable happen with or without life insurance. That can be a big wake-up call and by chance, you may come across such a situation in your late 30's early 40's. 15 year term life then takes your family out past college years and protects your family into early adulthood.
It also address a big part of your mortgage requirements for a typical house. If you have a 30 year mortgage and you're 10 to 15 years into it, 15 year term life carries you out through this financially responsibility. Even if you have 25 years left on your mortgage, 15 years of term life will afford you a length of time to adjust, re-evaluate, and move forward financially without the immediate pressure of a monthly mortgage that is no longer afforded without the primary earner in the family.
Affordability and the ability to pay the actual monthly term life insurance premium is a critical concern. Insurance agents are always quick to recommend lots of insurance but if you can't afford it, what's the point. With many kinds of insurance, covering 100% of the risk rarely makes sense as you're paying a dollar to get a dollar. That's why health insurance doesn't cover 100% (unless maybe you work for the Senate and Congress). It would be so expensive that it wouldn't make sense. Assuming a certain amount of term life benefit, 20 or 30 year term might be too expensive. Again, you need to afford the coverage. 15 year term life allows you to cover a great deal of the financial risk while still being able to pay the premium over the life of the policy. When you run your term life instant quote, adjust the desired amount of term life benefit while comparing 15, 20, and 30 year term. Take a look at the premium difference between especially the 15 and 20 year term life period. Of course, 20 might be better but only if it makes sense especially during the occasion financial tough times that a family or person may face.