May, 30 2017

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25 Year Level Term Life Insurance- Is it a Good Deal?

25 Year Level Term Life Insurance- Is it a Good Deal?

Many people don’t realize that there is a 25 year level term life insurance policy available as an option.  This is due to the fact that many companies don’t offer a 25 year level term policy product.  However, there are many top life insurers that do and it can be a great choice for certain applicants.

The most common term life insurance lengths offered in America are; 10, 15, 20 and 30 years.  Often in lieu of choosing the 25 year term, many people will choose either the 20 or 30 year level term to meet their specific needs and due the pricing differences.

For example, let’s take a look at the sample prices below for a forty year old male who is in great health seeking a $250k policy to protect his family.  The rates below are from AIG.

A 40 Year Old Male at the best health class

$250,000 20 Year Term- $20.02 month

$250,000 25 Year Term- $29.11 month

$250,000 30 Year Term- $33.43 month

As you can see the price difference between the 20 and 30 year term is significant; however, the difference between the 25 and 30 year isn’t vast, so many applicants select either the 20 or 30 year term depending on their needs and budget.  However, the 25 year term length is a good option to have available for those who need coverage for more than 20 years but don’t need the policy for the full 30 years.  (All will allow you to cancel anytime without a penalty.)

When a 25 Year Term Life Insurance Policy Makes Sense

The two most common instances when it’s best to select a 25 year term policy are:

-For applicants over the age of 59 years old and want to secure the rate for the longest term available.

For those between the ages of 59 to 65 the longest term available is a 25 year level term.  The 30 year is no longer available; however, the 25 year does have competitive pricing and will allow one to secure the rate for the next 25 years with the option to cancel at any time without penalty.

-For those who need the life insurance coverage for a specific time, i.e. the next 25 years.

Examples are someone who has 25 years left on a mortgage or loan, someone who wants to protect a child until they’re out of college or until a specific retirement age, etc.

Sample Rates for a 59 Year Male at the Preferred Plus Rate Class:

$100,000 25 Year Term- $100.01 month

$150,000 25 Year Term- $145.10 month

$200,000 25 Year Term- $191.34 month

$250,000 25 Year Term- $209.91 month

$300,000 25 Year Term- $247.91 month

$350,000 25 Year Term- $288.30 month

$400,000 25 Year Term- $328.79 month

$450,000 25 Year Term- $369.10 month

$500,000 25 Year Term- $387.10 month

 

Sample Rates for a 59 Year Female at the Preferred Plus Rate Class:

$100,000 25 Year Term- $72.89 month

$150,000 25 Year Term- $104.88 month

$200,000 25 Year Term- $137.71 month

$250,000 25 Year Term- $144.37 month

$300,000 25 Year Term- $172.14 month

$350,000 25 Year Term- $199.90 month

$400,000 25 Year Term- $227.67 month

$450,000 25 Year Term- $255.43 month

$500,000 25 Year Term- $261.58 month

 

25 Year Level Term Life Insurance- Is it a Good Deal?

So is the 25 year level term life insurance policy a good deal?  It will depend on your specific needs and the pricing difference between 20, 25 and 30 year terms. For those between the ages of 59-65 years old the 25 year term will be the longest term available.  Also, for those who have a specific need where 20 years will not be long enough, but don’t need the full 30 years, a 25 year term is a great option.  I urge you to use the pricing quoter to run the numbers to see which term; 20, 25 or 30 years would be the best fit your needs and monthly budget.