Last Updated: November 2019
Term life insurance is one of the simpler and least expensive options on the market. You are insured for a specific “term” or length of time, anywhere between 1 and 30 years, though often in increments of 10 years.
If you pass away during that term, your death benefit is paid out to your beneficiaries. If you do not pass away during that time, your policy terminates.
If you are concerned that your family will have a large debt to cover if you pass away unexpectedly, the term policy is the better option.
- How Long Is Term Life Insurance In Force for?
- 10 Year vs. 20 Year vs. 30 Year Term Life Insurance
- Why Should I Get 30 Year Term Life Insurance?
- Can You Get Money Back From a Term Life Insurance Policy?
- Term Life Insurance Rates
- Converting Term Life Insurance to Permanent – Does it Make Sense?
- What is the Difference Between Whole and Term Life Insurance Policies?
- How to Find the Best 30 Year Term Life Insurance Rates
Life Insurance is Boring. Let’s Get To The Root Of It! Here are the key takeaways…
30-year term life insurance policies are designed to provide protection for 30 years in exchange for a monthly premium. At the end of the 30 years, the coverage ends as do your monthly payments. 30-year term policies are often used to protect debts such as a mortgage.
How Long Is Term Life Insurance In Force for?
With a term life insurance policy, you can get term lengths ranging between 10 and 30 years typically in 10-year increments.
However, some companies offer 15-year increments as well. You can find term lengths of 10 years, 15 years, 20 years, 25 years, and 30 years.
This policy will pay out a death benefit to your beneficiaries if you pass away during that term. Once the term expires, if you are still around, you will need to purchase another form of coverage to have a death benefit.
10 Year vs. 20 Year vs. 30 Year Term Life Insurance
When you are considering the length of each term you want to consider how many years you will be paying your bills and therefore how many years you need in coverage in case you pass away unexpectedly early.
You want to buy an amount of time that will help your family if you are no longer there and provide for them. You might need to pay out that replaces your income. You might need a payout that replaces certain services that your family pays for.
If you are married and you have a dual-income household, your income might cover things like child care in which case the policy length should be long enough that it covers, however, many years your children would need that service and it should be adequate to provide the money necessary to cover that service for as long as it is necessary.
Ideally speaking a Term Policy will end because your families need for that money will end. Basically, you paid off your house, your remaining beneficiaries have money as their own, and your kids have moved out.
So, if you look at the pros and cons of each term length, it is really based on your age and your needs.
A 10-year term length might be just what you need to cover until your kids leave the house. A 10-year term length might be what you need after your previous life insurance policy expires.
However, depending on your age a 10-year term length might be the only policy you can get.
With any of these term lengths, one advantage is that most of the time your premiums are the level which means they do not change for the duration of the term.
So obviously picking a 30-year term might cost you a bit more but it could offer you higher coverage amounts and the money you pay will not change for 30 years.
Why Should I Get 30 Year Term Life Insurance?
30 life insurance policies are favored by people who just got married, have a baby on the way, or have young children.
If something should happen to you, a 30-year term policy will give your family enough replacement income that your kids can grow up and maybe even go through college and grad school.
This amount of time can also support your spouse and any other dependents for 30 years after your passing.
This is a better option for people who fall under any of those three categories listed above especially compared to shorter-term lengths because those shorter term lengths might not be enough to pay off things like a full 30-year mortgage, might not be enough to support new children for the duration of their childhood, etc.
A 30-year term is also preferred by those who might have declining health and any family history of diseases that might increase the premiums are charged.
If you know that things like high cholesterol and diabetes run in your family, a 30-year term policy might help you lock down an affordable rate before those things manifest in you or your spouse.
Can You Get Money Back From a Term Life Insurance Policy?
There are some term life insurance policies that offer what is called a Return of Premium Rider, which allows for the premiums paid into the policy to be returned if the insured outlives the term of the policy.
These riders make term life insurance policies more expensive. There are also Return of Premium Life Insurance Policies that are term policies that specifically offer this type of incentive to policyholders.
Can I Get My Money Back if I Cancel My Life Insurance?
You have the freedom to cancel your life insurance policy at any time. However, you do not get your money back.
Term Life Insurance Rates
This is the sample range for premiums for male and female applicants who are 48 years old, non-smokers:
| Coverage Amount/ Length | Male Monthly | Female Monthly |
|---|---|---|
| $500,000/ 10 Year Term | $35-$118 | $30-$105 |
| $500,000/ 15 Year Term | $46-$138 | $35-$124 |
| $500,000/ 20 Year Term | $61-$176 | $47-$143 |
| $500,000/ 25 Year Term | $89-$199 | $67-$146 |
| $500,000/ 30 Year Term | $104-$242 | $81-$199 |
This is the sample range for premiums for male and female applicants who are 58 years old, who are smokers:
| Coverage Amount/ Length | Male Monthly | Female Monthly |
|---|---|---|
| $500,000/ 10 Year Term | $366 | $356 |
| $500,000/ 15 Year Term | $459 | $427 |
| $500,000/ 20 Year Term | $608 | $601 |
| $500,000/ 25 Year Term | $866 | $798 |
| $500,000/ 30 Year Term | N/A | N/A |
| $500,000/ Whole Life | $5,049 | $5,012 |
This is the sample range for premiums for male and female applicants who are 68 years old, who are non-smokers but have moderate diabetes for which they do not take insulin:
| Coverage Amount/ Length | Male Monthly | Female Monthly |
|---|---|---|
| $250,000/ 10 Year Term | $236 | $161 |
| $250,000/ 15 Year Term | $327 | $212 |
| $250,000/ 20 Year Term | $533 | $3702 |
| $500,000/ 25 Year Term | N/A | N/A |
| $500,000/ 30 Year Term | N/A | N/A |
| $250,000/ Whole Life | $2,832 | $1,932 |
Converting Term Life Insurance to Permanent – Does it Make Sense?
Almost all term insurance policies can be converted to a permanent policy once the term expires. In most cases, you can do this without having to take another medical exam as long as you do it by a certain age or within a certain time frame.
Most insurance companies have a cut-off for the conversion of 75 years old.
Converting your Term Policy to a permanent one makes sense if you are trying to build savings. The permanent life insurance Price is much higher than a Term Policy because part of that price is going toward a cash value account.
You get to borrow against that cash value or withdraw money from it. So, if you are trying to set up some form of savings account or an extra form of financial protection on the off chance that a few years down the road your retirement plan is not living up to its expectations, this would be a good thing to do.
Another reason you might consider converting is your age. If you bought a term life insurance policy for ten years, for example, that might have been all you needed at the time. But since you purchased that original policy you might have new needs.
There might be a change in your lifestyle, you might have children who are now dependent on you. You might have a spouse or parents who are in-home care for whom you need to provide an income once you pass away.
The rates that you get are going to increase exponentially as you age.
So, if you are in your 50s or 60s and you have a Term Policy about to expire it might be a better fiscal opportunity for you to convert the policy into a permanent one using the same company so that you don’t have to undergo another medical exam and then you have coverage for the rest of your life.
If you wait and you purchase another term, then it might expire in your seventies or eighties at which point you may not qualify anymore for a permanent policy or a conversion.
What is the Difference Between Whole and Term Life Insurance Policies?
A term life insurance policy offers the lowest prices and is very simple. There aren’t a lot of options here other than the length of time.
A whole life insurance policy is a bit more complex, but it brings with it additional benefits.
Whole life insurance policies are the simplest form of a permanent policy which means that you get it for the rest of your life so long as you pay your premiums.
Whole life insurance policies have an investment compound that is called cash value. The cash value grows, and it is tax-deferred so as you are growing cash value you do not pay taxes on that money.
With this, you can borrow against that amount and have cash in hand if you need it.
You can also choose to surrender your policy which just means you cancel it and no longer get any coverage but if you do that all the money you have in built-up cash value gets sent back to you in the form of a check.
If you want to take out a loan from your life insurance, you can do so, and you don’t have to repay it with interest. What happens is, if you don’t repay it and you end up passing away, the amount that you borrowed is simply taken out of your death benefit.
With a whole life insurance policy, your death benefit is guaranteed which means they can never cancel so long as you are paying.
Your cash value will grow at a guaranteed rate, so you will automatically get more money associated with your death benefit.
Your premiums will also stay the same if you are alive.
How to Find the Best 30 Year Term Life Insurance Rates
When it comes to finding the best 30-year term life insurance rates, you want to be able to compare all of your coverage options across a number of policy types and life insurance companies.
Our independent life insurance agents work with dozens of the best term life insurance companies and will speak with you to learn your specific situation and needs to determine the best term life insurance coverage for you and your family.
Give us a call today, or get started with our online quoting engine for instant term life insurance quotes.
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