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20 Year Term Life Insurance Policy

by Jeff Rose on February 13, 2012 · 6 comments

20 year term life insurance policyIt seems lately that with mortgage rates so low and many people refinancing to 2o years, the 20 year term life insurance policy is becoming a much more popular option.

No matter which term of insurance you purchase, make no mistake it’s important to just buy it.

In the event something happens to you, it’s the only way to make sure your family is taken care of.

Who Would Want to Consider Buying a 20 Year Term Policy?

The most common ages of people I see purchasing a 20 year term life insurance policy range between 25 and 45.  As mentioned above, many in this age range will have their largest asset paid off (their home) and if their savings are on track, should be close to be self-insured by the end of the term.

When purchasing a 20 year life insurance policy, you will need to take several things into consideration. Obviously, you will want to get as much coverage for your family as possible, but you also need to make certain your policy is affordable. Therefore, you need to consider how much money your family will actually need if you were to pass away as well as how much you can afford to pay toward your premiums. By comparing different policies and taking a closer look at your current financial situation, you will find the right term insurance to suit your personal needs.

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How Much Does a 20 Year Term Policy Cost?

Below are some sample 20 year term life insurance quotes from some of the big carriers.  As you’ll see, I ran 20 year quotes for $250,000, $500,000 and $1,000,000.  I’ve listed the top 3 carriers for male and female and different ages (25, 35, and 45).

Please note that these quotes are subject to change depending on when you actually run the quote for yourself.

$250,000 20 Year Term Life Policy Quote

SexAGE20Yr Term Life PolicyCompany 1Company 2Company 3
Male25Face amount $250,000AMERICAN GENERAL
$154
BANNER LIFE
$155
SBLI
$158
Male35Face amount $250,000SBLI
$163
BANNER LIFE
$165
GENWORTH FINANCIAL
$178
Male45Face amount $250,000SBLI
$338
GENWORTH FINANCIAL
$339
BANNER LIFE
$340
Female25Face amount $250,000SBLI
$138
AMERICAN GENERAL
$139
BANNER LIFE
140
Female35Face amount $250,000SBLI
$145
BANNER LIFE
$150
MINNESOTA LIFE
$155
Female45Face amount $250,000SBLI
$273
GENWORTH FINANCIAL
$274
BANNER LIFE
$275

$500,000 20 Year Term Life Policy Quote

SEXAGE20YR TERM POLICYCOMPANY 1COMPANY 2COMPANY 3
MALE25$500,000 FACE AMOUNTAMERICAN GENERAL
$239
BANNER LIFE
$245
ING
$253
MALE35$500,000 FACE AMOUNTSBLI
$265
BANNER LIFE
$265
GENWORTH FINANCIAL
$284
MALE45$500,000 FACE AMOUNTSBLI
$615
BANNER LIFE
$615
GENWORTH FINANCIAL
$617
FEMALE25$500,000 FACE AMOUNTAMERICAN GENERAL
$209
SBLI
$215
BANNER LIFE
$215
FEMALE35$500,000 FACE AMOUNTSBLI
$230
AMERICAN GENERAL
$234
BANNER LIFE
$235
FEMALE45$500,000 FACE AMOUNTSBLI
$485
BANNER LIFE
$485
GENWORTH FINANCIAL
$296

$1,000,000 20 Year Term Life Policy Quote

SEXAGE20YR TERM POLICYCOMPANY 1COMPANY 2COMPANY 3
MALE25$1,000,000 FACE AMOUNTAMERICAN GENERAL
$414
BANNER LIFE
$425
SBLI
$440
MALE35$1,000,000 FACE AMOUNTSBLI
$450
BANNER LIFE
$455
NORTH AMERICA CO.
$485
MALE45$1,000,000 FACE AMOUNTBANNER LIFE
$1,155
SBLI
$1,160
GENWORTH FINANCIAL
$1,173
FEMALE25$1,000,000 FACE AMOUNTAMERICAN GENERAL
$354
SBLI
$360
BANNER LIFE
$365
FEMALE35$1,000,000 FACE AMOUNTSBLI
$390
AMERICAN GENERAL
$404
BANNER LIFE
$405
FEMALE45$1,000,000 FACE AMOUNTSBLI
$880
BANNER LIFE
$895
TRANSAMERICA
$930

In case you curious on how much $1,000,000 (million) term life insurance policy costs in others terms, follow the link to check out a post on my other blog.

Should You Consider a 10 or 30 Year Instead of a 20 Year Term Life?

Obviously, this all depends on your situation.  I can think of one client who took out a 10 year term policy and then was forced to renew 10 years later.  She was so young that it would have been wise to do a 30 year term, but she settled for purchasing a 10 year policy.  She was lucky in the sense in that even though she was 10 years older, the premium was almost the same.  If I were you, I would not bank on this strategy.

My buddy Phil from PT Money has the right thought process in buying his 20 year term policy.  Phil writes,

I plan to self-insure in the future. Twenty years from now I won’t need life insurance. I’m planning on having at least $500,000 of my own at that point. I’m taking serious steps with my retirement and short-term savings so that as soon as I’m able I can drop life insurance and rely on my own stash.

Many people that purchase 20 year terms do so with the same mindset.

Why I Purchased 30 Year Term Policies.

Part of me knows that it 20 years that I will be self-insured.  So why waste the money, right?  Good question.  I’ve asked myself the same thing and my conclusion comes with losing my father in his late 60′s due to heart disease and Type II diabetes.

Although I’m in excellent health now, I always play the “what if” card.   And there’s some reassurance that from the ages of 54-64, my family will have that much more to take care of them if something happens to me.

Do I Need to Take a Medical Exam to Purchase 20 Year Term?

While yes, there are 20 year term polices that require no medical exam, it’s typically not suggested if you in good health.  The exam is very basic – just like going to your doctor office; expect the nurse comes to you!.

Every time I’ve had a medical exam, a traveling nurse has either came to my house or office and it literally took less than 20 minutes.  It’s very simple and they are often willing to work around your schedule.  FYI, I prefer if they can come to my house in the mornings since you are usually required to fast and I don’t like going too long without eating something.

What do you do with Your Insurance Policy After 20 Years Expires?

Good question.  First things first.  If you are truly worried about it, then you might want to consider just buying a 30 term life insurance policy.  Yes, it will cost a bit more; but at least you’ll be rest assured that you’re covered for another decade.   If you’re still dead set on a 20 year term insurance policy, then read on….

Typically, your insurance company will give you the choice to continue your policy on an “annual renewable basis”.   What does that mean?  That means that you can keep your policy in force by continuing to pay the premiums.  I’m sure you’re wondering what the catch is.   The catch is that annual premium is now determined based on your current age which means it will be much higher; not what you locked in 20 years ago.

The one positive thing about the “annual renewable basis” option is that you don’t have to get a new medical exam.   So if you’re in bad health, this might be a good option for you so as long as you can afford the premium.

Don’t Forget Your Beneficiaries

It seems it talking about life insurance, we are always focused on the insured.  But the reality is that the only reason we are taking out the policy is for our beneficiaries.

The first beneficiary that is always selected is your spouse.   No question.   After that you name them, you’ll then want to list your children.   While this all sounds basic – and it is – I’m amazed at how many people overlook this.

Another BIG mistake I see is when a divorce happens or a new child is born and the beneficiaries don’t get updated.

How to Get a 20 Year Term Life Insurance

If you want to get a 20 year term life insurance quote for yourself, you don’t have to go too far.  If you can either use the quote engine on the top left of this site, the one below, or go to his page and get a free term life quote.

20 Year Term Life Insurance Policy by

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{ 6 comments… read them below or add one }

James March 5, 2012 at 7:40 pm

I got what you mean, thanks for sharing this. Thanks For Sharing info on a 20 Year Term Life Insurance Policy – Term Life Insurance.

Reply

denise February 18, 2013 at 6:05 pm

my question is if you get a 20 year term life policy and pass away before the 20 years if its a 500K policy do your beneficaries get only what you paid in? and if you pass away after the 20 years and dont renew do they still get the 500K? or do you have to renew it?

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Jeff Rose February 21, 2013 at 3:46 pm

@ Denise A 20 year term policy is good for 20 years so as long as you make the premium payment. So if you’re paying on for 15 years and something were to happen to you, your beneficiaries would receive the $500k.

After 20 years the policy expires and you’ll then have the choice of renewing or converting it to a permanent policy. Keep in mind that it would then be based on your current health condition.

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Donal March 20, 2013 at 7:20 am

I think one can go for both policies. He can start with a term policy and in the mid of that he can convert that into permanent policy. Like he took a term life insurance for 20 years at the age of 30. when the policy get complete then he will become 50. That time if he goes for any insurance policy then he can’t get a good policy because of his week physical state. So he can switch the policy after 10 years completion. That time he will be of 40. His physical state will also be good that time so it will be easy for him to switch.

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Debbie April 23, 2013 at 2:13 am

Hello Jeff, I currently have Northewestern Mutal 250,000 Whole Life 20 yr policy with the remaining 10 yrs left at 175.00 a mo. I should of thought at the time and so should of my agent that I am going to probably out live my policy and now at 58 prices are so much more expensive. Now what do you think my solution should be? Go with a new policy with the same companr and just do term for 250,000 or 500,000 and drop the whole life. The quote I am getting with them is 250,000 (104 mo) and 500,000 (198.00 a mo). What is your opinion

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Jeff Rose April 23, 2013 at 1:56 pm

@Debbie Really depends on what your objective is. Do you still feel you need that amount of life insurance coverage? Also, do you have any cash value built up on the whole life policy that you might be able to apply to a paid up permanent policy?

Regarding your rates, use our free life insurance quoter to see how our prices compare to what your Northwestern rep is quoting you. Feel free to give our office a call, too!

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