Term Life Insurance Options

When it comes to term life insurance you have a lot of options. Let’s talk about your options and what makes the most sense. 

Term life insurance has several options. 5 Year terms, 10 year term, 20 year term and 30 year term. All that means is you know EXACTLY how much you will pay and what coverage you have for that time period. Simple to understand. 

Here’s some tips to look out for:

5 Year term is not a good choice. When you compare 5 year term and 10 year term, it almost the same price. It makes more sense for you to pay the same amount for 10 year term than pay for 5 years and then have your rates to go up. This is one of the reasons most companies do not offer a 5 year term anymore. 

Term 10 is the most affordable option for you today. That being said you need to factor in how long you will need the coverage. For example, because rates go up at year 10 if you factor in the higher rates and you need the coverage for 20 years it no longer is the most cost-effective option for you.

Term 20 work like a term 10 policy. The only difference is you are guaranteed a longer time. 

But let’s look at a term 30 policy. Because they start to act a little differently. Some term 30 polices have added benefits that other policies don’t. Years 16-20 of a term 30 policy has three options you.

• Cancel your payments and get a reduced coverage for the remainder of your term 30
• Cancel your payments and get a small amount (typically around 15-30k) of coverage for the rest of your life
• Cancel your payments and get a small amount of money back

All the options are available for you. Yes, a term 30 will cost you more per month then any other option, however, if you are looking to cover a 25-year mortgage term 30 offers you a lot more than the other options.