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Benefits of Term Life Insurance for a 20-Year Term

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There are many different kinds of life insurance policies, but term life insurance for 20 years is one of the most popular choices among the many types out there.

A 20-year term policy can provide you with both a guaranteed premium rate, as well as any death benefits should you pass away during the 20 years your policy is active.

These types of policies are incredibly affordable and flexible, which is why they’re so popular.

What is term life insurance?

Over the last several years, life insurance ownership has reached up to 52% in the U.S. making it a staple among most households.

A term life insurance policy provides coverage for a certain period of time, whether that be 10, 20, or even 30 years.

Buyers often purchase a term life policy to replace their income once they retire and to save their loved ones from financial stress should they pass on and still have after-death expenses that need to be paid.

With a 20-year term life insurance policy, you pay a fixed rate each month for the next 20 years. If you pass away during this time period, your family will receive a tax-free cash payment in either a lump sum or through timed payments. This can in turn be used to pay off your financial obligations or funeral expenses.

20-year term life policies typically cost less than permanent life insurance policies, while also providing you with greater flexibility if you want to switch or extend your coverage in the future.

What is included in a term life insurance policy?

Term life insurance guarantees payment for any beneficiaries listed on the policy as well as any riders included. These policies have no other cash value besides the guaranteed death benefit.

But depending on your insurance company, it may be possible to turn your term life policy into a whole life insurance policy as long as your premiums are up-to-date and paid.

How much does a 20-year term life policy cost?

This will depend on what company you choose to purchase your term life policy from.

Usually a 20-year policy costs, on average, around $19.78 to $35.24/month depending on how much coverage you have.

However, this can’t be said the same for people with poor health or have any pre-existing conditions, since policies are generally more expensive with an average cost of $33.11 to $59.14/month.

Factors that will impact your eligibility and rates for a 20-year term policy:

  • Age
  • Gender
  • Health status
  • Lifestyle habits

Insurance companies will also determine your life insurance rates by considering your driving history, any past criminal history or records you may have, as well as your occupation and other financial factors.

Is a 20-year term life policy better than a 10 or 30-year policy?

The length of your term policy will depend on a few factors, such as kids, projected retirement age, mortgage, debt, and other deciding factors.

A 20-year term life insurance policy is a popular choice because, by the time the 20 years is up, kids have grown up and you may have fewer debts. Making the transition over to a whole life insurance policy easier than being locked into a 30-year term life policy and having to wait it out.

Why should I go with a term policy rather than a whole life policy?

Of the two policies, a 20-year term life insurance policy is the most affordable when starting out with life insurance.

Whole life policy premiums tend to be much higher, but they also come with permanent coverage and the ability to build cash value, which term life policies don’t have.

It will all depend on what you want to see for your future, and what plans you have later on down the road. Which is another reason that 20-year term policies are so popular. You won’t be forced into a locked term longer than necessary.

What happens after 20 years with my term life policy?

At the end of your 20-year term policy, you can choose whether to renew it for a higher premium and continue on with another term length or transition into a better earning policy, such as whole life.

You may also be able to convert your term policy to whole life insurance during your 20-year term depending on your company and if your premiums are up-to-date.

If you decide you no longer need coverage altogether, you can simply stop making payments effectively ending your coverage.

Are medical exams required for eligibility with a term life policy?

Typically a medical exam is required for coverage under a term life policy. This exam is free to you and will factor in your height, weight, and medical history. A licensed professional may also take blood and urine samples if additional testing is required.

Your medical exam results will help determine your insurance rates with your insurance company.

Fortunately, you only need to take the exam once over your policy’s entire lifetime. So, even if your health situation changes in the next 20 years, you’ll still be covered and your premiums won’t increase.

There are some term life policies that don’t require a medical exam. However, you can expect higher rates with these policies.

Benefits of Term Life Insurance for a 20-Year Term: The Bottom Line

Choosing a life insurance policy can be daunting, but there are plenty of options to choose from and flexible coverage that can be tailored to your needs. Starting out with term life insurance for 20 years may be a good choice, especially since rates are much lower than some other types of policies.

If you feel like 20 years is too long for a commitment with a term life policy, don’t worry. There are some companies that allow you to switch over to a whole life policy after a certain time period.


Katherine Warnock

Katherine is a freelance editorial writer with a degree in Advanced Technical and Development Writing from SUNY Adirondack. She has years experience writing on topics such as finance, insurance, and personal development.

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