If you are considering term life from one of the best life insurance companies in the US, you will need to make a decision on the term length and the face amount of the policy.
How Much Term Life Do You Need
How much life insurance you need is a personal choice, but one that should take into your earning power over your lifetime, any debts, such as a home mortgage, and whatever else matter to you specifically.
You can use any online life insurance calculator to help you determine how much life insurance you should get.
How Long Should Your Term Life Insurance Last
The second consideration is how long of a term you should get. You have many options to choose from.
The different term lengths available include:
- Annual Renewable Term
- 5 Year Term
- 10 Year Term
- 15 Year Term
- 20 Year Term
- 25 Year Term
- 35 Year Term
- 40 Year Term
With so many term options to choose from you can tailor a policy to meet your needs, whether you just want short term coverage, or something that will last until you retire and beyond.
How Long Is Term Life Insurance
People will often ask “how long is term life insurance.”
And the answer is, it depends.
Term life insurance lasts for a period of time, the term. Your policy can be any term length you choose, from annual renewable term, 5 years, and on up to 40 years.
It is important to understand that when your term ends, your policy will expire. You can choose to renew your policy annually, however your premium will increase each year.
And over just a few years time your premium will most likely be way too high for it to make sense to continue to keep renewing your policy every year.
That is why it makes the most financial sense to lock into as long of a term as you think you need while you are younger, that way you don’t find yourself coming to the end of your term policy and wishing you had locked into a longer term 20 years ago, when you where young and healthy.
“What Term Life Insurance Should I Get?”
The following are simply basic categories that you can consider when determining how long of a term you should get. However, each person is unique and life is anything but certain, so feel free to reach out to us at IBUSA if you would like a helping hand in determining the best term life insurance policy for you.
Primary Bread Winner
The primary bread winner, AKA the main income earner of the household, should consider getting a term policy for as long as he or she plans on working.
So, if you plan on working until age 65 or 70, you can get a term policy that will last until you retire.
For example, a 40 year old looking to work until 65 should consider a 25 year term policy that will replace their income if they should pass away before retirement.
Most people that buy a home get a 30 year mortgage. So, it makes sense to get a 30 year term policy to cover the length of the mortgage.
However, be aware that statistically speaking, most people only remain in their home for roughly 13 years.
So, maybe a 15 year term life insurance policy is all you need. Then again, maybe you are the exception who is lucky enough to remain in place for the full duration of your mortgage.
New parents need life insurance to provide income replacement if they were to die prematurely. You can use the age of your youngest child to determine the optimal term length.
You will also want to consider the possibility of future children and how long you will need to provide for them as well.
If you are just starting a family, a 30 year, or even 40 year term life insurance policy might just be the ticket.
Often newly married couples look to get life insurance to provide for each other. Just like new parents, longer term life insurance policies are probably the best option.
However, you might consider that a larger death benefit and shorter term life policy makes more sense initially until you can build up a nice nest egg.
Small Business Loan
Many aspiring entrepreneurs look to the SBA to help fund their business start up. In return, the SBA loan program will often have business owners take out a life insurance policy as collateral for the SBA loan.
A 10 year term life insurance policy usually meets all the SBA loan requirements, and will cost less than longer term policies, such as a 20 or 30 year term.
Different Term Life Insurance Rates
A huge factor in deciding how long of a term life policy to get is price. The shorter the term length, the lower the cost of the term life insurance.
The following term life insurance charts will give you a sample of how much term life insurance will cost based on the term length you choose.
The following sample rates are from many of the top rated life insurance companies. All rates are for informational purposes only, are subject to change, and must be qualified for.
10 Year Term Life Insurance Rates
20 Year Term Life Insurance Rates
30 Year Term Life Insurance Rates
40 Year Term Life Insurance Rates
Deciding on how much coverage you need and the right term length for you takes a bit of planning. The good news is the pros at IBUSA are here for you.
We can help walk you through the different term lengths so you can make the best decision for you, based on your unique needs and goals.
So what are you waiting for? Give us a call today to experience the IBUSA difference.