Understanding Life Insurance Term Lengths
What They Are & How to Choose the Best Option
Life insurance is an essential tool for anyone who wants to protect their loved ones financially after they pass away. One of the most important decisions you’ll make when purchasing life insurance is the term length. Term length refers to the amount of time the policy is in effect with a locked-in rate, and it is one of the primary factors that determine your monthly premiums.
Continue reading to review the different term lengths available for life insurance and learn how to choose the best one for your needs.
Term Lengths for Life Insurance
The most common term lengths for life insurance policies are 10, 15, 20, 25, and 30 years. However, some insurance companies offer term lengths that can range from 5 years to 40 years.
- 10-Year Term Life Insurance: This is a popular term length for those with short-term insurance needs. This can include those who want coverage a little longer while their children are still living with them, have remaining time on a mortgage or other debt to pay off, or have a business arrangement requiring life insurance.
- 15-Year Term Life Insurance: This term length can also be ideal for those who have a mortgage, children, and want to ensure their family is financially stable during their most critical years.
- 20-Year Term Life Insurance: This term length is the most popular choice for those starting a family who need to provide financial security for them, but are on a limited budget.
- 25-Year Term Life Insurance: This term length is not as common as the others but may be suitable for those who want to ensure their family is protected throughout their children’s college years.
- 30-Year Term Life Insurance: This is the most common term length for life insurance policies for those who have an established income and want to ensure that their income and their family will be financially protected throughout their working years until they reach retirement.
Choosing the Best Term Length for You
Choosing the best term length for your life insurance policy will depend on several factors, including your age, health, financial obligations, and future plans.
- Age: Your age is an important factor when selecting a term length for your life insurance policy. If you’re younger, and can afford it, you may want to consider a longer-term, as it may be more cost-effective in the long run.
- Health: Your health is another crucial factor in determining the best term length for your life insurance policy. If you have a chronic illness or a family history of health problems, you may want to consider a longer-term policy as it could be difficult to acquire new coverage in the future.
- Financial Obligations: Consider your financial obligations when choosing a term length for your life insurance policy. If you have a mortgage, young children, or other debts, you may want to consider a longer-term policy.
- Future Plans: Consider your future plans when selecting a term length for your life insurance policy. If you plan to retire soon and have few remaining financial obligations, you may not need as long of a term as someone who plans to work for several more decades.
- Budget: You must also consider what you can afford to pay now in addition to what you will need later. As longer term lengths cost more now, you may need to purchase a shorter term period to start to make sure you are able to purchase the amount of life insurance that you need.
CEG Life Insurance Services Can Help
Choosing the right term length for your life insurance policy is an essential decision that can have a significant impact on your financial future. Consider your age, health, financial obligations, and future plans when selecting a term length. You can run instant price quotes on our website for all of the most popular term lengths. However, remember that it’s always best to speak with a licensed insurance agent to help you make an informed decision. Contact us at CEG Life Insurance Services for more information on the best life insurance policy for your circumstances.