Business Finance | 20 Year Term Life Insurance

by Dennis Jarvis

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.

Read more...