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The Benefits of 15-Year Term Life Insurance

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If you’re searching for a life insurance policy that will cover you for several years, a 15-year term is a great option. Indeed, term life insurance is incredibly popular right now. Because of that popularity, there are many options offered by a wide variety of insurance carriers.

Of course, with so many choices available, you have a perfect shot at finding a policy that’s best suited to you and your financial needs.

While some life insurance policies have shorter terms, a 15-year policy offers more security without the commitment necessary for longer, 20- to 30-year policies.

At the end of the day, 15-year term life insurance may be a great choice for those who want coverage at an affordable price and for a limited duration.

What is term life insurance?

Term life insurance is among the most trendy types of life insurance plans. It offers protection for a set time, typically 10-30 years. If the policyholder passes away within that time frame, the beneficiaries will receive a death benefit.

You can use the death benefit to help cover final expenses, pay off debts, or replace income.

One of the main advantages of term life insurance is that it is generally more affordable than other types of life insurance, including whole life and universal life. This makes it an attractive option for those on a tight budget. 

Another benefit is that it is simple to understand, and there are no cash value components to worry about. Those searching for a life insurance policy that will last their entire life may want to consider whole life or universal life instead. 

These policies have cash value components, which can be used as an investment tool or to help pay premiums if needed. It’s essential to understand the different types of life insurance before deciding which one is right for you.

What is a 15-year term life insurance policy?

A 15-year term life insurance policy is a life insurance policy that covers the insured for 15 years. The policy’s death benefit is paid to the beneficiary in the event of the insured’s death during the policy term.

With a 15-year term policy, you can lock in a set premium and death benefit and know that those you love will be financially secure if something happens to you. 

That said, the premium and death benefit can fluctuate depending on several factors, including:

  • Age
  • Health
  • Required coverage
  • Additional riders

The policy typically ends at the expiration of the 15-year term. You can choose to renew it with increased premiums or purchase an entirely new policy when it expires.

Why do people choose term life insurance?

There are many reasons why people choose term life insurance over other types of coverage. One of the main reasons is because it is more affordable than permanent life insurance. Term life insurance also offers more coverage flexibility and can be tailored to meet your specific needs.

With a term life policy in place, you can rest assured that your family will not have to bear the burden of any financial debt or expenses if you should pass away. However, it does require a bit of forward-thinking to ensure that you acquire the coverage you need. 

Ultimately, you have to understand that term life insurance can help you reach and surpass a certain point in life. You’ll need to do the math to ascertain how much life insurance you’ll need and for how long.

Some examples of why people choose term life insurance include:

  • Minor children. Some have young children and want to ensure that their spouse can afford childcare and education costs if they were to die.
  • Substantial debt. Others have large debts or a mortgage that would need to be repaid in the event of their death.
  • Primary provider. If they are the primary income earner for their family, they want to ensure that their loved ones are financially secure if they were to die.
  • Financial strategy. Others want to use term life insurance as part of a financial plan to help protect their family’s assets and wealth in the event of their death.

Keep reading to learn if a 15-year term policy might be right for you.

Benefits of a 15-Year Term Policy

Term life insurance policies are the most affordable type of life insurance. A 15-year policy has lower premiums than a 20- or 30-year policy.

A 5-year policy may be too short for your needs, and a 10-year policy may also not be long enough. Therefore, a 15-year term life insurance policy is an excellent middle ground.

Other benefits of a 15-year term life insurance policy are:

  • Peace of mind for the policyholder and beneficiaries
  • You can cover essential years and periods of life at reasonable rates
  • The death benefit can be provided to the policyholder in staggered payments or in one lump sum
  • A shorter commitment time frame than policies with longer terms
  • A 15-year term is long enough to cover many major financial obligations such as a car loan or student loans.

Conversion to whole life insurance at the end of a 15-year term policy is a sound decision for young adults who want the benefits of whole life insurance but can’t afford it at their current stage in life. 

The conversion process is relatively simple. You can usually convert it through the same company that issued the term policy. Plus, conversion from a term life policy to a whole life plan has many benefits. The most important is that it typically locks in your rates.

Who needs a 15-year life insurance policy?

Fifteen years might seem like a short amount of time, but it can be an ideal term in many situations. That time frame may be right for you if:

  • You’re nearing retirement. A 15-year policy can help you close the gap between your last years of work and the beginning of your retirement.
  • You have a 15-year mortgage or another long-term loan. This policy can ensure that your loved ones won’t have to take on your debt if you die before you pay off the mortgage. 
  • You have kids who will finish college within 15 years. A 15-year policy can provide peace of mind that your kids will be able to afford to attend a university even if something happens to you.
  • You are young, healthy, and don’t have the money to pay a lot in premiums. A 15-year policy can give you coverage while you send your kids to school, purchase a home, or scale your career.

If the above do not apply to you, it may make more sense for you to buy a policy with a longer term.

How much does 15-year term life insurance cost?

The cost of term life insurance is dependent on many different factors, such as:

  • Age. The younger you are, the lower your premiums will be.
  • Gender. Women are given lower rates than men since they tend to live longer.
  • Location. Some states have lower life insurance rates. For instance, New Jersey’s rates are lower than New York’s.
  • Health. Your health status matters to life insurance underwriters. Your statistical life expectancy is used to calculate your monthly premiums.
  • Smoking status. Since smoking dramatically decreases life expectancy, smokers are given higher rates than non-smokers across the board. Life insurance companies have completely different categories for smokers’ rates.
  • Lifestyle. Are you active, and do you get enough sleep? Do you drink alcoholic beverages or do recreational drugs? Underwriters think about all of these factors when calculating your life insurance policy rates.
  • Policy type (term, no exam, permanent). Term life insurance is typically the most affordable type of life insurance. No exam and permanent are also feasible options, but they cost more.
  • Term length. The longer your term, the more expensive your monthly premiums will be.
  • Coverage amount. Your monthly premiums will be more expensive the more coverage you have.
  • Additional riders. Riders are add-ons that you may choose to attach to your policy. While they offer valuable benefits, they also raise the cost of your policy. Popular riders include Accelerated Benefit, Long-Term Care, Disability, and Waiver of Premium.

Different insurance companies will weigh some of these factors differently, so it’s best to get quotes from multiple insurers before choosing a policy.

15-Year Term Life Insurance: The Bottom Line

If you are considering life insurance for a specific period, term life insurance is an excellent option. It is cheaper than permanent life insurance and offers more flexibility in terms of coverage. You can tailor a policy to meet your specific needs, making it a great choice for those who want protection for a particular duration.


William Blesch

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