Not everyone needs a huge amount of life insurance, and $25,000 (or even less) could be enough to serve your needs.
Buying smaller life insurance policies, especially those under $50,000, can be very cost-effective, too.
Here are some sample quotes for about how much these $25,000 policies will run you, on average.
Sample Quotes For A $25,000 Life Insurance Policy
We’re going to show you some sample rates in a few different formats so you can compare which scenario is most like yours.
It’s highly suggested to only get coverage for as long as you need so you don’t overspend.
Just remember, if you reach the end of your term and need to keep your coverage, you can expect significant jumps in your premiums.
10-Year Term Rates
If you’re in excellent shape and don’t use tobacco products, here are some of the best rates you could receive today for a 10-year term policy:
15-Year Term Rates
Under the same conditions, here’s what you might be able to secure if you’re seeking a 15-year term:
20-Year Term Rates
If you’re looking for a term policy for a 20-year duration, here’s what you might expect:
As you can see, the longer you lock in your rates, the higher the premiums will be.
This is why we suggest you get exactly the right amount and for just as long as you may need the coverage to avoid overpaying.
But there may be other considerations for you to think about before you sign the dotted line!
Keep reading below for a few examples where you may need to think twice about a small term life policy.
Who Needs $25,000 of Life Insurance Benefits?
$25,000 sounds like a like of money, but you may be surprised to find how little it can do if a person leaves behind significant debts or obligations.
The average funeral alone can cost upwards of $8,- to $10,000, at a minimum.
This means you’ll need to make the remaining $15,000 go a pretty long way, to pay for:
- end-of-life bills, like medical or hospice care if it wasn’t covered by (or exceeded) health insurance
- small debts, such as outstanding consumer credit (or liens) which might otherwise pass along to a spouse or dependent
- replace income, where a spouse might receive less pension benefits or social security income
These expenses could add up to a significant amount for everyone from infants to seniors.
There are likely many other reasons a person would have life insurance, but the truth is a $25,000 policy just doesn’t go much further than paying for these main items.
iI you’re buying a policy for a decade or two down the road, it may be hard to assess whether any of these factors are going to affect your own situation
With such a timeline, you should also consider inflation, as $25,000 today will likely not go as far toward paying bills and expenses in 10 or 20 years.
Who Does NOT Need A $25,000 Life Insurance Policy?
With the reasonable premiums above, you might be considering buying coverage just because it’s so cheap.
Maybe you don’t really need life insurance but think having it may be a nice perk down the road, just in case.
But, in all honesty, if you don’t need it, you don’t need it!
Don’t waste your money on life insurance, even if it’s just a small policy amount like $25,000, just because you can afford it.
There are several instances when a person doesn’t really need coverage, in any amount.
If you can check off all four of the boxes below, you probably don’t need life insurance right now:
- No dependents: If you’re single and no one depends on your income, you may not need coverage.
- No debts: As long as you leave no debts to someone else, you may be all set without coverage.
- No charitable interests. Some folks have a life insurance policy because they simply want to pass along a leveraged amount of money to their heirs. If that’s not you, you may not require a policy.
- No need for final expense coverage: If you meet the criteria above and have enough in savings to pay for funeral expenses, you’re good to go.
Should You Buy Term Or Permanent Coverage?
There are two types of life insurance you’ll have to consider: one is term, one is permanent.
Much like their names imply, one will only have level premiums and a level death benefit amount, for a specified duration of time, while the other will stay the same for as long as you live.
However, with such a small death benefit, your choice between the two may be limited!
You’ll find it much harder to find cheap term life insurance policies with such small death benefits; many companies don’t offer them.
In addition, many consumers will find a better solution with a more permanent product for such a small amount of coverage, anyway.
Because people typically opt for $25,000 of coverage to pay for final expenses and paying off, a short-term product rarely fits the need.
Instead, you’ll likely need to compare the different kinds of permanent life insurance, like:
- Universal: This may be the cheapest way to secure permanent coverage, but it isn’t always guaranteed
- Whole: This will be the most secure coverage you can purchase, since it’s always guaranteed as long as you make your payments on time
- Graded/Guaranteed: These kinds of policies are the most expensive, and should only be used if you can’t qualify for either of the other two options.
If you’re young and healthy enough to qualify for a longer duration term life insurance policy, it will offer you the best value, as long as it sufficiently covers your needs.
Top Companies Who Provide $25,000 Life Insurance Policies
Below are the best companies for buying $25,000 in life insurance coverage based on what type of policy you can qualify for.
Best Companies for a $25,000 Term Policy
If a basic $25,000 term life insurance policy is your best fit, the companies below are currently great options:
Assurity has routinely come up as one of the best companies for a $25,000 term life insurance policy, as far as price goes. In nearly every instance, Assurity is the cheapest option, for nearly all ages and genders.
Assurity is rated an “A-” by A.M. Best and is a long-standing, financially sound carrier.
If you just need a short to medium-length term insurance policy, we would suggest taking a look at Assurity.
Another carrier who does very well in the small term policy arena is Transamerica.
One of the bigger, more well-known brands throughout the United States, Transamerica is the closest Assurity has to a competitor when looking at $25,000 term policies.
Rated an “A” by A.M Best, as well as an “A” or better rating by all three other major rating agencies, Transamerica is a company you can count on.
We especially like Transamerica if you’re looking for additional products or conversions down the road.
Last, if for whatever reason you don’t apply with either Assurity or Transamerica, perhaps Americo is the right company for you.
Americo is another “A” rated carrier by A.M Best, yet they are a little smaller in scale and product.
You can get a smaller term life insurance policy from Americo without an exam, as well as from the carriers above.
Best Companies for a $25,000 Whole Life Policy
If a basic $25,000 whole life insurance policy is a better fit, here’s who you may want to turn to:
If you’ve never heard of Foresters, you may want to go ahead and do your research before you purchase a $25,000 whole life policy. You might be surprised by what you find.
This “A” rated carrier is an excellent option for those looking to get a small permanent policy, especially for men and women in the older demographics.
When you’re sure you need a whole life policy for up to $25,000 in coverage, investigate Foresters before making your purchase.
Even though we’ve got Assurity ear-marked as your number one go-to for term life insurance policies at the $25,000 death benefit amount, you may do just as well by them with a whole life product, too.
Assurity has excellent rates for whole life and has quite a versatile product to offer.
If you think you want to start with a term product but convert to whole life later, you may want to consider buying your coverage through Assurity for this benefit.
3. Sagicor (Universal)
One company who does well in the life insurance industry by allowing applicants to skip the medical exam is Sagicor.
If you’re healthy and want a basic whole life policy without an exam, you might consider Sagicor.
An “A-” rated carrier by A.M Best, you can feel secure about buying a long-term policy through this insurer.
And that is critical when you’re buying a policy you expect to last your lifetime. If Foresters or Assurity don’t make your match, consider looking at Sagicor.
Best Companies for a $25,000 Graded Life Policy
If you have some health concerns, but they aren’t too severe, you may want to look at a $25,000 graded policy from these carriers:
1. Fidelity Life
You may know the name Fidelity from the investing world, but they do life insurance, too. In fact, for a graded policy (and accidental, too), they are a great option for many.
Rated an “A-” by the rating agency A.M. Best, Fidelity Life has a Senior Term Graded benefit option to back up their strong ratings with a strong product.
If you’re looking for $25,000 in life insurance but have some minor health conditions to navigate, check with Fidelity.
2. Security National
Another company doing well for small graded policies, however, is one you likely haven’t heard of before.
Security National Life Insurance Company is a less well-known carrier, but has an affordable product which might meet your needs.
Yet another insurer rated an “A-” by A.M. Best, they are secure and ready to handle the long term protection you might require.
Fidelity Life is the best choice in this category, but Security National can be an excellent backup.
3. United Home Life
Finally, United Home Life can also be a solution to your needs if you aren’t perfectly healthy but still require $25,000 worth of coverage to meet long-term needs.
An “A-” rated company, United Home Life has a quality Express Issued Whole Life policy with a graded benefit you can count on to be there when you need it.
You can likely find better, cheaper options with the other two companies listed above, but if they are unavailable in your state, give Security National a try.
Best Companies for a $25,000 Guaranteed Life Policy
The hands-down best carrier for a $25,000 guaranteed life insurance policy is available through the very company you may recognize as the deliverer of baby food, Gerber.
Yes, Gerber. They actually have an “A” rated life insurance company and a great life insurance product available for every person from virtually birth to aging seniors.
It’s a high-quality life insurance product you can’t be turned down for. If you are poor in health, Gerber’s guaranteed product is a great option for you.
If you’re not interested in life insurance from a “baby food” company and prefer a financial institution, AIG will have you covered.
All four major rating agencies, as well as J.D. Power and Associates, agree AIG is a financially strong, well-rounded company.
And if you have a need for a permanent life insurance policy with little to no headache from underwriting, AIG is a solid option.
3. Mutual of Omaha
Gerber is great. AIG is great. Mutual of Omaha is great, too. As great as Gerber and AIG are, they have an excellent competitor in Mutual of Omaha and barely win out because of price.
Mutual of Omaha is the best all-around life insurance company among all three but was slighted to third just based on the product category.
If Mutual of Omaha is the most comfortable purchase to meet your guaranteed insurance needs, you’ll pay just a small premium for excellent coverage.
3 Bonus Tips To Lower Your Premiums
There are a few little pointers we’re happy to pass along to help you save every possible dollar on your coverage.
The first couple may seem obvious, but the third is a big one a lot of people miss out on.
1. If you smoke, you should consider stopping.
If you use tobacco products, you’re going to pay a lot more than the average person.
However, in order to be considered a non-smoker, you may have to wait a year or more to get the non-smoker rates.
An occasional cigar on the golf course or yearly work party won’t knock you down, but virtually everything else will mean a big increase in your premiums if you use them regularly.
2. Shop your rate before you apply.
This likely goes without saying anymore, but there are a LOT of life insurance companies out there, and many specialize in specific products or demographics.
Obviously, nobody expects you to become an expert. Instead, you can lean on us for expert advice.
Just make sure you get plenty of quotes before you end up finalizing your decision. It could save you thousands over the course of the next 20 or more years.
We recommend the companies above, but you may find you have access to additional companies because of where you live, for instance. Take all of them into consideration.
3. Consider paying annually, if you can foot the bill.
Often overlooked, this is a great way to save a percentage on the premiums you’d otherwise be paying on a monthly schedule.
Life insurers are willing to cut a discount to those who pay annually because it ends up being easier for them to handle.
There’s no chasing anyone for change in banking information or lapsed premiums.
If you can foot the annual bill, it’s definitely worth the savings.
Final Thoughts On Buying $25,000 of Life Insurance Coverage
We suggest you take on this important purchase in a very procedural manner:
- Figure out exactly what your need is first.
- Next, find out what product matches your need.
- Third, research the companies who offer that product.
- Apply to the company who’s got your product at the lowest rate.
Finally, remember that going through the underwriting process can mean lower rates for your policy.
By skipping the examination or blood work, you will pay extra for the convenience.