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In This Article I’m Going To Offer A Detailed Analysis Of How To Get A Quality 20 Year Term Life Insurance Product
Most likely you’re here today because you’re looking for life insurance for yourself or a loved one. You may be wondering what factors come into play when considering a 20 year term life insurance product. If this describes your circumstance, then this article will be very useful to you.
We’ll go into several topics as they relate to buying a 20 year term insurance to ensure you get a life insurance coverage at the best possible price.
NOTE: Would you prefer me to present this information to you in video format? Watch the video below for the complete presentation. Enjoy!
Specifically, We’re Going To Talk About:
- What Kind Of Person Gets A 20 Year Term Life Insurance Product
- Case Study Examples
- Reasons For Purchasing A 20 Year Term Life Insurance Product
- Stories From The Field
- Why A 20 Year Term May Or May Not Be Right For You
- The Pros And Cons Of A 20 Year Term Insurance Product
- Top 7 Reasons People Buy Term Insurance
- Strategies For Optimizing Your Purchase
- Different Rates Available For 20 Year Term Life Insurance Coverage At Different Age Ranges
Who should buy a 20 year term life insurance product?
In this section I want to start off by describing the kind of person that most likely purchases a 20 year term life insurance product. I think this point is important because it helps you better understand the types of circumstances in which a 20 year term life insurance product makes sense and helps you solidify your confidence in a 20 year term life insurance product if it is right for you.
Single or divorced with children
If you are single, but plan on eventually getting married and having children one day, buying a 20 year life insurance product makes a lot of sense. Why? Because most likely you’re young and age is always a factor when you purchase life insurance, whether that’s a 20 year term life insurance plan or something different.
Insurance tends to be much less expensive for those who are in their twenties than those who are in their thirties or forties. Life insurance is one of those products that gives you a better deal the sooner you buy it.
Buying a 20 year term insurance product can be a great idea if your ultimate goal is to make sure that you have coverage in place to protect your future family, spouse, and children.
If you’re divorced, or divorced and have children, you are also in a good position to buy life insurance, especially if you are paying child support and have children that depend on you economically. A life insurance plan can be specifically designed to take care of your children if you pass away and cannot pay child support anymore, or just simply pay for the welfare of your children economically if you were to die earlier than expected.
The biggest reason why people purchase life insurance is because they have obligations or financial concerns and recognize that other people may be negatively impacted if they were to pass away earlier than expected.
Insurance can’t replace you, but it certainly can replace the economic stability that you provide your family and give your family a much better lease on life.
Married with or without children
One of the biggest motivations for picking up life insurance is committing your life to somebody you love for the foreseeable future, through the act of marriage.
Marriage is an outward sign that you are committed to loving somebody till death do you part and part of love, in my opinion, is protecting your loved one against the uncertainties of life – the biggest uncertainty being your death.
We just don’t know when we will die. It could happen when we are old and have lived a full live, or it could happen tomorrow.
A 20 year term life insurance product can help protect your spouse against this uncertainty and offer peace of mind should anything happen to you.
It’s a great plan to start off with when you are newly married as it gives you adequate coverage for a good period of time and allows you to provide an income replacement to your spouse and family should anything happen to you.
Many people we talked to at Buy Life Insurance for Burial are looking for life insurance because they are experiencing growth in their career. They’re getting promotions, going up the corporate ladder, and earning a higher income.
Typically with a higher income comes higher levels of obligation. Sometimes people purchase a new home, move up economically, and find they are now under higher obligation.
This is a perfect reason to purchase life insurance in order to ensure your higher and larger income, which usually coordinates with a higher standard of living and future debts.
If you pass away early on in your career advancement, a 20 year term life insurance product can fund some of the financial concerns you may have, ensuring your family and children are taken care of and don’t have to worry about paying off debts or finding additional income.
Someone who is closing in on retirement or who is probably very close to retirement may find a 20 year term plan a great option for certain financial obligations.
What we see in America now is more people are retiring with mortgages that have yet to be paid off or have many years left to be paid off.
The concern is what will happen if you pass away before your mortgage is paid off? A 20 year term life insurance product does a fantastic job of allowing for insureability at older ages while also covering major obligations or debt such as a mortgage, loans, and the like.
Also a 20 year term life insurance plan can be used to some extent as a pension plan replacement policy.
For example, if you have a pension but it’s not transferable to your spouse, a life insurance plan can provide a lump sum death benefit for your spouse as a supplement for the lost income from your pension, which goes away when you pass away.
We here at Buy Life Insurance for Burial are committed to helping individuals cover final expenses, cover mortgage payments, and replace income if you pass away sooner than expected.
We search among the most competitive providers to find coverage that meets your individual needs. Let us help by providing a free quote. Simply call (888) 626-0439 or submit a message to the left-hand side of the screen and we will reach out to you within the next 24 business hours.
Case Study Examples
New Home Owners
A couple of years ago a young couple came to me and explained they had just purchased a home. They were concerned about the new debt they had taken on and worried if one of them passed away earlier than expected that the surviving spouse would struggle to make the mortgage payments.
They wanted to get term life insurance for 20 years, but were concerned because they both suffered from depression and took medication for their condition. They worried this would have an impact on the underwriting process.
Thankfully they came to Buy Life Insurance for Burial and we were able to get them a great deal on term insurance that met their goals and budget. We work with a number of providers to provide the best possible coverage per dollar to our clients.
While every situation is different, and not all applicants will qualify, we do our best to find coverage our clients can afford and that meets their individual goals.
Rate Increase and a History of Diabetes
A woman recently reached out to me because she had received notice in the mail that her life insurance rate was going to significantly increase. She couldn’t afford to keep the policy and wondered if we could offer something more affordable.
The only problem was she suffered from diabetes and had to take a large amount of insulin each day to keep her blood sugar under control. She was concerned this would affect her ability to qualify for affordable coverage.
Thankfully we were able to shop a number of providers to find a plan that was right for her budget and insurance goals.
Though we can’t guarantee coverage for everyone in the same situation, we do our very best to find affordable coverage for every client. You never know when the unexpected may happen. Give yourself the peace of mind in knowing your expenses and family will be taken care of if you pass away earlier than expected.
Seven reasons to get a 20 year term life insurance product
Now that you know some of the life events and circumstances in which people consider a 20 year term plan, let’s talk about specific reasons why someone would purchase a 20 year term life insurance product. Understanding other people’s circumstances will help you more confidence in your ultimate decision to purchase a life insurance product.
1. Mortgage protection
Studies show that the biggest reason why people purchase a life insurance product is because they want to cover obligations such as their mortgage, with mortgages usually being the single largest debt that a family incurs.
It makes sense to buy a life insurance plan that coordinates around your mortgage to make sure that it’s paid off.
A so called mortgage protection life insurance program protects your family from the potential of losing your home should you pass away unexpectedly. Once the plan is in place, you will have peace of mind in knowing that your home is owned free and clear and your family does not face the risk of foreclosure or being evicted because of a loss of income upon your passing.
2. Income replacement
Many financial planners agree that 10 times your annual income is a good amount of life insurance coverage to start with.
If you die earlier than expected, your family will lose out on many years of income you would provide.
By covering 10 times your income, you ensure your earning power remains and your family has time to recover and develop a plan to continue economically without you. It also allows your family to maintain their standard of living without worrying about how they will pay bills and other expenses.
3. Retirement protection
If you pass away before you reach your retirement, you’ll also lose the funds that you would have set aside in your pension plan or retirement program.
Buying life insurance is a great way to insure against those future contributions towards your retirement fund that you otherwise would have put aside.
Think about buying 20 or 30 years away from your eventual retirement goal. One of the beauties of financial planning is the miracle of compound interest which grows your principle into a very large balance over a long period of time. Your family will lose out on that benefit if you die early in life.
Insurance will work to replace that future compound benefit with a lump sum benefit that will hopefully accumulate something similar to your retirement amount.
4. Leave a legacy
People buy 20 year term life insurance for a number of reasons including leaving it behind to their favorite charities or church. The way you do this is fairly simple.
You simply take out a life insurance plan as normal, but instead of naming a family member as a beneficiary, you name the charity, church or organization of your choice.
This leaves a death benefit behind if you die within the 20 year term period of time to the named organization of your choice. A lot of people feel good about this because it’s a way that they can provide some sort of benefit to an organization they’ve grown to love and trust.
5. EST protection
If you own a large estate and are at risk of potentially having a large taxation event upon you or your spouse’s passing, a 20 year term life insurance product may be a good way to ensure there is proper liquidity to pay for taxes on what’s required on your estate.
6. Cover a key person
If you’re a small business owner or entrepreneur, carrying life insurance is extremely important, not just to cover yourself and your family, but also to cover your business.
There are definite economic reasons to carry life insurance if you are a business owner, the most common being the coverage of a key person in the business.
If you own a small business and you have employees, there’s likely one particular person or multiple people who play an important key role in the continuity of your business. If you’re a business owner, you know that your business essentially is based on your people and the benefit that they provide. For example, if you have a sales team, you may have a sales manager that does a great job and has key contacts that allow your business to thrive.
Imagine losing this person. It would take time to find a replacement and train that person to the same capacity, as well as to rekindle relationships with vendors and customers. In this situation you could potentially face tremendous economic losses by losing that key person.
Life insurance provides a death benefit to the corporation where the key person is insured. The corporation makes the premium payments, but the corporation has paid the death benefit to offset the death of that person and the value they provide their business.
7. Business continuity coverage
If you’re in business with somebody else or in some sort of partnership arrangement, have you ever thought about what would happen if your partner passed away? Who would become the owner of the business?
If you don’t have any sort of document describing a business continuity succession plan, then you need to give serious consideration to term life insurance.
Take this example:
Your partner passes away. Their surviving family members, let’s say their oldest son, becomes the joint owner of your company. Do you think their son would have the exact same goals as you have for your business? Most likely they wouldn’t.
Perhaps they would want to drive more income out of the business, whereas you would prefer to reinvest it back into the business and grow your business more. You won’t have the same relationship with your partner’s son as you had with your partner and this conflict could potentially put the business at risk, so it makes sense to buy out their shares to continue the business on your own as you see fit and have sole ownership of the business.
Traditionally, the only way to do this, upon the passing of a partner, is to fund a buyout agreement. But where would you get those funds? A loan from the bank? The problem with this scenario is that if your partner played a key role in your business, it may be unlikely that the bank will want to provide financing. This is how the continuity of your business can be put at risk
Considering that the key person is gone and there are going to be potential disagreements between new owners, there is only one viable solution – create a market for the buyout of your business if either one of you passes away. This is called a buy-sell agreement or a partnership dissolution agreement. It’s a very simple concept and here’s how it works.
Your partner is insured just like yourself with a life insurance policy of which the corporation makes the payments and there’s also a beneficiary on the plan. You create a legal document that stipulates that if either partner dies, the death benefit is paid to the family, and the family receives that money on condition that in exchange for this coverage they sell their part of the business.
In exchange you, the surviving partner, receive those shares of the business to become the exclusive owner. This allows for a transfer of business to take place and gives you the opportunity to retain full control of the business and maintain business continuity without the potential problems arising out of having heir owners.
8. Loan collateralization
If you have ever thought about taking out a loan to grow your business , it’s likely a bank will require you have self insurance to cover the bank in case you were to pass away. It’s a good idea to pick up a 20 year term life insurance product to make sure the bank is covered if you happen to pass away and the bank has not received its total capital.
If you like what you’ve read so far, why not give us a call for a free, no obligation quote at (888) 626-0439. You’ll speak to a friendly representatives who can provide you with more information and a quote. Alternatively, you can send us a message using our message box and we will respond directly within the next 24 business hours.
Stories from the Field
Early on in my career I happened across a small, rural area in Tennessee where I met two sisters who were caring for their elderly uncle. Both of the ladies had insurance, but their uncle did not. They were concerned about what would happen when their uncle passed away, as they had meager savings and their uncle had nothing to cover final expenses.
They knew their uncle would have a large funeral at an expense of $10,000 to $15,000 and they didn’t want to go bankrupt trying to come up with the funds, so they decided life insurance was the best route.
I was able to qualify their uncle for first day full coverage despite some of his health issues. It was about 2 years later I got word that the uncle had died. I’m proud to say we were able to get half of the life insurance funds to the sisters within 24 hours, with the rest of the funds being payed out over the next few weeks.
This was a huge relief to the sisters who didn’t have to worry about coming out of pocket to cover the funeral and burial expense. They were able to properly grief for the loss of their loved one without the stress of financial concerns.
I see this scenario all the time in this business and am reminded on a consistent basis why it is so important to have first day full coverage in place so that your loved ones have the means to cover final expenses.
Is a 20 year term life insurance plan right for you?
There are circumstances where getting a 20 year term life insurance product is not a good idea. There may be other products that will serve your purposes better.
In this section, I’m going to talk about the limitations of a 20 year term life insurance product so that I can get you thinking a little bit more about whether or not a 20 year term life insurance product is the best choice for your circumstances.
Length of time considerations
My goal when I sit down with my clients is to make sure that if someone selects a 20 year term life insurance product that it accurately aligns with their insurance goals or covers their biggest concerns. People buy life insurance because they recognize their potential for financial problems. Some problems are temporary in nature. Some are permanent.
For example, a permanent problem we all have to face is the cost of burial, so with certain final expense related costs it’s important, I believe, to have permanent protection such as a whole life or universal life plan. Whereas if your problem is temporary in nature such as the coverage of a mortgage, you don’t necessarily have to have term insurance for the rest of your life to cover a mortgage because you will at some point pay the mortgage off.
What this all comes down to, and the reason I’m mentioning all of this, is that when you buy a term life insurance product, you’ve got to make sure you’re covering for the length of time in which the problem will be there.
For example, if you have a 20 year mortgage payment plan, a 20 year term life insurance plan makes perfect sense. However, if your mortgage is 30 years long and you’re looking at 20 year term, that will leave you with 10 years without coverage, so it would make more sense to go the 30 year term route instead.
Covering for longer than is needed doesn’t make sense either. If you have a business loan that has a five year payback, a 20 year term life insurance plan may not be the best option. Although if you have plans for coverage after the payment is paid off on your bank loan, then it’s sensible. Although a shorter period of time, say five or 10 years, may make sense as well.
Make sure that your 20 year term life insurance plan aligns perfectly with the length of time that your obligation last for and also be sure it matches the nature of your obligation, meaning it is either temporary or long term.
Many people who may be looking at the option of getting a 20 year term life insurance plan may see the price is ultimately based on their health and age and balk at what premiums are required to keep the policy enforced. There are a couple of alternatives to this.
You can reduce the premium size by reducing the coverage amount. This means you can pay less and do not have as much coverage. So maybe instead of a $250,000, 20 year term plan, you take out a $150,000, 20 year term, which will lower your price substantially. Alternatively, you can keep the same amount of coverage but reduce the term time from 20 to say 15 or 10 years.
Ultimately this decision of how to reduce the premium to a level you’re comfortable paying is important and should be talked about with your life insurance professional. Reason being that you need to consider, again, the main reasons why you’re buying life insurance.
And make sure if you have to make a compromised decision that you make the best choice amongst the options you are faced with.
Lack of availability
A 20 year term plan may sound like the perfect solution to you, but you may find that a 20 year term life insurance product, simply put, is not available. Why? Because you’re at an age in which 20 year term insurance products become much more difficult to get.
If age is a factor for you in the process of getting a 20 year term life insurance product, you may want to consider what’s called a universe life plan, which can be designed to cover you no matter what your age might be.
The pros of a 20 year term life insurance product
In this section, we’ll talk about the positive aspects of a 20 year term life insurance product and why it’s a smart decision for some people to buy a 20 year term insurance product to satisfy their life insurance goals.
Length of time
As long as the obligation you have in mind has a 20 year time horizon, a 20 year term life insurance product is a perfect solution. Again, my goal for my clients is to match the type of term insurance product they purchased with the obligation time period. So if you see a time horizon of 20 years or less, then it’s probably a good reason to buy a 20 year term insurance product to convert that time period.
Many 20 year term life insurance products have the option to convert into what’s called permanent protection. This means that you can take a portion of your term life insurance and turn it into a permanent plan that does not cancel due to age. This insurance usually has a lock in rate feature as well.
This is great if you have a potential need later in life after your term insurance expires to cover for permanent problems related to things like final expense coverage.
Many 20 year term life insurance products offer the opportunity to buy additional riders to offer additional benefits beyond a death benefit payout. A couple of examples of riders include:
- Disability waiver, which waves the premium payments if you cannot work
- Accidental coverage, which will pay double to triple the amount if your death is accidental
- Chronic illness riders that pay a benefit to you if you’re diagnosed with cancer or some sort of cardiac type of event. Premiums are usually about the same amount as a regular plan without riders.
Drawbacks of 20 year Term Life Insurance
What are some of the drawbacks of a 20 year term life insurance plan? There are circumstances where a 20 year term life insurance plan may not be the right choice due to any one of these cons.
Keep in mind that all life insurance companies are very technical and mathematically oriented when they offer life insurance product and approve you for a 20 year term insurance plan. It’s likely that they’re betting that you’re going to outlive the 20 year term life insurance plan.
If you find that you may need coverage outside of the 20 year term life insurance period you’re considering it’s highly worth reconsidering the amount of coverage and opting for either a higher amount of term life insurance, such as a 25 or 30 year term insurance product, or perhaps even a permanent life insurance product like a whole life or guaranteed universal life plan.
Again, we’re matching your insurance needs with the appropriate insurance product and there are times in which a 20 year term insurance product doesn’t match your needs because you require coverage beyond the 20 year term period of time.
Twenty year term is not permanent coverage. So if you need coverage for something that is long term, like business continuity insurance, a pension protection plan, or if you need final expense protection, its likely a 20 year term insurance plan isn’t right for you. Again, if the risk is there that you may outlive the coverage and still have a need for it, you need to seriously consider a permanent plan instead.
Price increases are inevitable
Once you outlive the length of time in which a term insurance is guaranteed, in this case 20 years, typically you either see a cancellation of the coverage or pricing that goes through the roof that it becomes unwieldy and unworthy of keeping.
Top 7 reasons people buy Term Insurance
Many people purchase term insurance because it is one of the most affordable types of insurance. Term insurance allows people to get affordable, quality life insurance in place while meeting their budgetary needs.
The primary reason why people buy term life insurance is to make sure their financial obligations are taken care of if they pass away earlier than expected. If you have a family or are married, income replacement is especially a concern. Term insurance can cover the expense of a mortgage, bills, and the cost of living if you pass away unexpectedly to ensure your family or spouse is taken care of financially.
One of the great things you can do with a term life insurance plan is to continue to fund your retirement plan if you pass away earlier than expected. A lot of people have retirement plans but never consider what would happen to that plan if they died. To ensure your spouse or family can benefit from your retirement plan, it’s important to get a life insurance plan in place.
Love is one of the biggest motivating factors for buying life insurance. We love our spouse and our kids. We want them to be provided for when we pass away. Life insurance ensures those you love do not have to struggle financially after you’re gone.
Term insurance is a unique type of life insurance that can be customized to meet the clients specific needs. Whether you have a 10 year financial commitment or a 30 year commitment, you can decide the length of time your term insurance will last.
6.Pure insurance need
Term life insurance is ultimately good for one purpose – to pay a death benefit upon your passing within the term time. Term insurance has no added extra costs and is one of the most affordable types of coverage.
7.Exams are not required
Life insurance used to require exams, but that is no longer true. You can get term insurance without ever having a physical exam or seeing a doctor. This is great news for those who prefer to take the non-medical application route.
Strategies to buying a 20 year Term Life Insurance product
I’m going to talk about five specific strategies designed to optimize your abilities to give you not only the best 20 year term life insurance product, but also the most competitive price. Follow one, if not all, of these recommendations to give yourself the most optimal chance for the best overall package deal.
Laddering strategy versus one policy
Some insurance agents recommend that you take out multiple life insurance plans, say a total of $500,000 in coverage, but one at a 10 year term and the other at a 20 year term where one is $200,000 and the other is $300,000. This way, you begin to scale out your life insurance coverage and reduce it as you’re need drops. In exchange you may find that the overall price you pay is much less over the 20 year period of time.
While the concept sounds good on paper, here’s the problem with it. The likelihood of your obligations and needs for life insurance typically increased with time, not decrease as many of us get into mid career and beyond.
As we get older we often find that our income increases. Our lifestyle and what’s necessary to maintain our lifestyle also increases as well. And in turn our need for life insurance increases that much more.
My recommendation is to always maximize the amount of coverage you can get for the longest period of time. If you have determined that 20 years on your term insurance product is a good place to start, I don’t see any reason to reduce that amount of coverage to take out a second plan and save a couple of bucks.
I’ve worked in the insurance business since 2011 and time and again have seen that more often than not people need more coverage than they think they need, so approach this option with caution.
Too old for 20 year Term Insurance?
As my clients get older it becomes more difficult to find 20 year term life insurance coverage. The solution to that difficulty is to take out a universal life plan that can be designed to cover ages 80, 90, 100 or beyond. This acts similar to a term life insurance product and can provide a temporary life insurance solution for a longer length of time.
Understand that the longer you hold a terminal universal life coverage plan the higher the price will be. But this may be the only option for some of you out there that still need term life insurance coverage at an approximate length of 20 years or greater, but can’t find it any other way.
Exam versus no exam
My suggestion is that if you’re in good shape and you don’t take a lot of medications to always consider taking the exam as a part of your life insurance application.
The reason for this is simple. Life insurance companies determine rates and eligibility based on the history of your health and the more information a life insurance company can gather on you, the more confident they’ll be able to offer you a more competitively priced deal.
If you opt for a no-exam life insurance policy, then your life insurance company won’t have the most up to date information on you and it’s likely that they’ll bake in a higher price point to accommodate for the risks that you could have some sort of unknown disease that they otherwise would have caught if they did an exam. This is pivotal because if you do an exam and you pass it, the price differences can be substantial.
I literally save more than a thousand dollars a year with my life insurance product simply because I opted for a onetime blood withdrawal, health questionnaire, and blood pressure check as part of my exam. So I encourage my clients, if they are healthy, to do an exam to get the best overall deal and maximize their coverage.
Buy from a broker at Buy Life Insurance for Burial
At Buy Life Insurance for Burial we don’t represent just one company like many insurance agents out there. We represent a multitude of companies. We take our client’s cases and shop them amongst a number of carriers available to us to see who’s going to give you the best price and the best amount of coverage.
The advantage of this is that many times we can work with companies that are more willing to work with certain sets of health, hobbies or professional issues that may be turned down by or be seen as problematic by other companies. There is no one size fits all solution in the life insurance business though many companies would like for you to think this is the case.
Often if you get stuck with a one size fits all life insurance company, you’re going to pay a higher price and not have nearly as much coverage for what you’re paying for either. Why do that to yourself? You wouldn’t go pay $20,000 for a brand new car if you could purchase it elsewhere for $10,000, right?
That’s how life insurance works. We want to get you the best overall package and working with a broker like us here at Buy Life Insurance for Burial allows for that to happen and gives you the best chance for the best overall deal.
Rate chart comparisons for 20 year Term Insurance
What follows are 20 year term life insurance rates for different coverage amounts for males and females, age 25 to 55. I will also show you some universal life plans for those whose age makes it more difficult to qualify for a 20 year term.
Rates for $100,000 in Coverage
Rates for $250,000 in Coverage
Rates for $500,000 in coverage
Rates for $1,000,000 in Coverage
Rates for 2,000,000 in Coverage
These prices are subject to change and are based off of preferred ratings. In order to potentially qualify for these rates, you have to submit an application and your rates will be subject to your underwriting decision. These are for examples purposes only.
I certainly hope this article has proved useful. If you find that you still have questions or would like to find out what your monthly premium might look like, please get in touch.
We can be reached via our message box on this page or by calling (888) 626-0439. You will speak with a knowledgeable expert in the field who can answer any questions you might have at no obligation.
A free quote takes less than 10 minutes, so give us a call today! Thanks for stopping by.