Compare 20-year term life insurance policies | finder.com
Family in living room

20-year term life insurance policies

We value our editorial independence, basing our comparison results, content and reviews on objective analysis without bias. But we may receive compensation when you click links on our site. Learn more about how we make money from our partners.

A 20-year term is the most popular period of coverage. Here’s why.

So, you’ve decided to purchase a term life insurance policy. The next question is: How long do you need coverage?

For young and healthy people in their 20s, 30s and 40s, a 20-year policy is the most popular term. It offers protection and peace of mind for a formative time of your life, and it’s an inexpensive, reliable option. While a lot can change in 20 years, your premium stays the same and will see you through major life changes, such as marriage, kids, college and buying a home.

It’s an ideal choice for those who are still working and paying off debts while building their financial wealth. It offers their dependents a sense of financial security, and means they’ll be in a good position to renew or convert to a permanent policy later.

Why we like:

Compare quotes from 16 life insurance companies side by side.

  • Compare multiple providers
  • Calculate how much coverage you need
  • Get a quote in 2 minutes

Why we like: Policygenius

Compare quotes from 16 life insurance companies side by side.

  • Get the coverage amount and term that's right for you.
  • Choose between term or whole life insurance.
  • Easy online application process.
Promoted

Life insurance companies that offer a 20-year term policy

Name Product Issue Ages Coverage Range Medical Exam Required
20 to 60 years old
$100,000 to $8,000,000
No
Term life insurance with no policy fees and the freedom to cancel anytime. Simple application process that can get you approved for coverage instantly.
20 - 80 years old
$25,000 to $10,000,000
No
Quickly get a quote for coverage with this marketplace, which compares term life insurance policies from 45+ carriers.
21 - 54 years old
$50,000 to $1,000,000
No
Affordable 2-, 10- and 20-year term life insurance policies. Instant quotes and no medical exams.
18 - 85 years old
$10,000 to $10,000,000+
Depends on provider and policy
Compare quotes from 16 life insurance companies side by side.
20 - 85 years old
$100,000 to $1,000,000
Get a term life insurance quote from Fidelity Life - starting as low as $15/day.
18 - 75 years old
$100,000 to $5,000,000
Depends on provider and policy
Apply for a simple instant-decision policy free of charge. Compare quotes from multiple A-rated carriers.
18 - 80 years old
$50,000 to $25,000,000
Depends on provider and policy
Get a quote within minutes from more than a dozen insurers.
18 - 75 years old
$25,000 to $10,000,000
Yes, for policies over $1 million
Term life insurance with no medical exams for $1 million of coverage or less. Online application gets you a decision in 10 minutes.
18 - 80 years old
$25,000 to $10,000,000
Depends on provider and policy
Compare quotes from over 40 highly rated carriers and get coverage shortly after approval.
18 - 64 years old
$100,000 to $3,000,000
No
Customized term life insurance policies up to $3 million, no medical exam required.
18 to 85 years old
$10,000 to $1,000,000
No
Affordable life insurance for active duty, reserve, and retired United States military service members. Get a free quote online.

Compare up to 4 providers

What is the typical cost of a 20-year term life insurance policy?

As with all life insurance, the rate you’re offered is based on a range of factors, such as your age, health, lifestyle, medical history and occupation. In general, the younger and healthier you are, the cheaper your rate will be.

With term life, the premiums stay the same for the life of the policy, which is why it’s a good idea to lock in a good rate early on. That way, even if your health changes over the course of 20 years, you won’t be charged more.

Let’s look at the typical cost of a $250,000, 20-year term life insurance policy.

According to our research, the monthly cost for a 30-year-old nonsmoking man living in Los Angeles, California might be between $13.12 and $33.64. For a smoker, the rate tends to start at $39.77 and go up to $78.62.

For a 30-year-old nonsmoking woman, it might set her back between $11.71 and $30.28 a month. If she smokes, the rate could climb to somewhere between $32.03 and $62.65.

To demonstrate how age affects your rate, we’ll use a 50-year-old man as an example. A nonsmoker could be charged between $40.85 and $116.16 a month, while a smoker’s rates might start at $159.23 and go up to $316.67 — at this age, he’s riskier to insure.

A 50-year-old nonsmoking woman might pay between $31.17 and $85.09 a month. As always, life insurance is more expensive for smokers; in this case, her policy could start at $119.67 and go up to $218.09.

Once a term policy is set, it’s set. You can’t change the amount of coverage, but if your circumstances change and you realize you need more, you can purchase an additional term life policy.

Average monthly rates provided by Quotacy for a 20-year $250,000 term life coverage for a nonsmoker in great health:

AgeMaleFemale
25$14.55$12.73
30$14.84$13.13
35$15.65$13.99
40$20.85$18.23
45$30.96$25.60
50$46.30$35.82
55$72.32$54.42
60$126.03$91.59

For a smoker in great health:

AgeMaleFemale
25$42.99$35.44
30$46.89$39.20
35$54.07$45.51
40$76.75$61.02
45$122.53$90.45
50$184.14$132.89
55$280.83$194.53
60$453.27$301.31

What is my risk of dying in the next 20 years?

The reason term life insurance rates are on the cheaper side is because people are living longer. Life expectancy plays a huge part in an underwriter’s calculations.

According to our life expectancy data, for a typical 40-year-old man, the risk of dying in the next 20 years is 10.20%. For the average woman, it’s 6.46%.

To put this into context, it helps to analyze these figures next to the average life expectancy in the US. A man who reaches his 65th birthday can expect to live until 84.3, while a woman is likely to live until 86.6. Of course, these are averages — around a quarter of 65-year-olds will live past 90.

Who should buy a 20-year policy?

A 20-year policy is the most popular type of term insurance, especially for the young and healthy. In general, term life insurance has a slew of benefits:

  • The monthly payments are lower than that of a permanent policy, like universal life.
  • The premium stays the same. That means you’ll pay the same amount for 240 months. The price won’t increase unexpectedly or over time, so you can stay ahead of inflation.
  • The death benefit is tax free.

Life insurance is highly personalized, so the best policy for you is a product of your income, your financial needs now and your financial goals for the future. For most people, the primary reason for purchasing life insurance is income replacement.

To decide if it’s right for you, think about your life 20 years from now. Are you still working? Have you paid off the debts. Do you have kids, and if so, are they all grown up? Is your spouse working? How much are they earning? Is it enough to cover your family’s living expenses?

A 20-year term suits young people as they build a family and become more financially comfortable. It provides protection for 20 years, and the knowledge their families won’t face financial trouble if they die. It’s also budget friendly, allowing them to buy high levels of protection when their need is greatest, and at a low rate. Term insurance is great for covering financial needs that disappear in time — and a 20-year policy is practical.

Let’s say you’re a 30-year-old man with a wife and two kids, aged five and seven. Your wife is looking after the children, but plans to return to work in a couple of years. You’re climbing up the career ladder and earning a steady income, but you’re still paying off your student loans or chipping away at your mortgage.

You’re the ideal candidate for a 20-year policy. It provides coverage at a time when your family is the most vulnerable and will continue to do so until your kids are 25 and 27 years old. By that time, they’ll have graduated from college or become working adults, establishing their own careers. As a parent, you want a policy that sees your family through those high-cost school years, and a 20-year term will do exactly that.

Over the course of those 20 years, you’ll have progressed in your career, and most likely be earning more money. As a result, you may have paid off a significant portion of your debts, like that pesky mortgage. If you’re a committed saver, you may be partially or completely self-insured by the time your 20-year policy ends. And if you decide you need more coverage, you’ll be in a better financial position to afford the amount you want. You may also be able to renew or convert your policy while good rates are within reach.

People in their 30s and 40s commonly purchase 20-year policies. This generally takes them up until their retirement or until their families are financially secure. It also gives them the option to purchase another 20-year policy if they outlive their current one.

What happens if my policy expires?

If your policy expires, that’s a good sign: It means you’re still alive and, hopefully, in good health. As for the next step, you have a few options:

  1. Renew the policy. You can apply for another term life policy just before it expires, or before you turn 70. The renewal rate will be much higher than your previous premium as it’s based on your age and health when you applied. You’ll most likely have to take another medical exam and answer those same questions you did 20 years ago. Since you’re older, you’re a riskier candidate; in other words, there’s a better chance the life insurance company will have to pay out your death benefit. That being said, if you’re still relatively healthy, you may be able to requalify at a reasonable rate.
  2. Convert the policy. If your term policy has a conversion feature, you can opt to upgrade to a permanent policy, such as whole life or universal life. With most providers, you can convert without providing evidence of your insurability, like undergoing another medical exam. Permanent policies are more expensive, but they offer lifelong protection and never expire as long as you pay your premiums. Conversion is a popular option for older, affluent policyholders who want to treat life insurance as an investment and a key part of their financial and estate planning. A lot can change in 20 years, so before signing the dotted line, double-check that your policy has good conversion terms in case you need continued coverage later on down the road.
  3. Let the policy lapse. If you no longer want or need life insurance coverage, you can simply let your term life policy end.

Should I choose a longer or shorter policy?

That depends on your situation. To calculate your needs, think about why you’re purchasing life insurance. Is it to simply cover your end-of-life expenses and pay off your debt? Or do you want to give your family a sense of financial security for the future, and maybe leave your kids or grandkids an inheritance? Your needs will be different if you’re still working.

If your needs are temporary, term life insurance will probably still be the best option for you.

Most people choose a term length that takes them up until their retirement. That way, they have the time and income to pay off their debts while building up a comfortable nest egg.

One case where you might want a shorter policy

If you’ve been steadily chipping away at your debts and predict you’ll have paid them off in less than 20 years, consider a shorter policy. This helps you to avoid the common mistake of buying too much coverage, and for too long.

One case where you might want a longer policy

If you have more than 20 years left on your mortgage, it’s a good idea to look at longer coverage, such as 25 or 30 years. Your life insurance policy should ideally cover your mortgage so your family isn’t saddled with the financial burden if you die.

Bottom line

There are plenty of life insurance policies on the market, and 20-year term policies are the most popular — especially for those in their 20s, 30s and 40s. It makes sense. This kind of coverage offers protection and peace of mind during a period of major life changes, like marriage, children and buying a home, all while giving you the time to pay off your debt and build up your wealth while you’re still working.

Life insurance is personalized. To make sure you’re buying the coverage that suits you best, explore our guide to life insurance.

Find a life insurance policy today

Use our magical comparison tool to find the best rates in your area.

Your information is secure.

Frequently asked questions

Was this content helpful to you? No  Yes

Ask an Expert

You are about to post a question on finder.com:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder.com provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and Terms of Use.

Questions and responses on finder.com are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.

Is a 20 year term life insurance the right option for You?

We value our editorial independence, basing our comparison results, content and reviews on objective analysis without bias. But we may receive compensation when you click links on our site. Learn more about how we make money from our partners.

20 year term life policy explained.

There are many reasons why people often shy away from insurance. A survey conducted by Risk Store (2010) found that 81% of the respondents said that insurance is expensive, with 41% who mentioned that it is too complicated. You might be surprised to know that most insurance premiums actually cost less than a cup of coffee a day. There are many types of life insurance policies you can choose from according to the lifestyle and needs you have without harming your budget. One of the most common types of insurance policies is term life insurance.

What is Term Life Insurance?

Term life insurance provides you coverage in the event of death or if you have been diagnosed with a terminal illness (with only 12 months to live) for a specified period of time, depending on the length of cover you have chosen. Your nominated beneficiaries, which are usually your financial dependents, such as spouse/partner, children, siblings, or aging parents, will receive a lump sum benefit payment that they can use to keep on top of their financial commitments.

Most people choose term life insurance for specific financial obligations, which will often include:

  • Daily living expenses
  • Mortgage repayment (or rent, if you don’t own your home)
  • Payment for your children’s education
  • Short-term or long-term debts
  • Payment for funeral expenses

Compare quotes for 20 year term life insurance

Why Choose Term Life Insurance?

One of the biggest attractions of term life cover is the cost of premiums that are cheaper compared to the other types of insurance policies. This type of life insurance policy is flexible, allowing you to choose the length of cover that suits your needs and situation. You can also tailor your life policy to include coverage for total and permanent disability and/or trauma, and other options that are available for additional costs to ensure a benefit is received if you suffer serious illness or injury.

Term life insurance is a type of cover that offers flexibility to be adjusted as your circumstances change. You can increase or decrease the amount of your cover at significant life events, which in turn will adjust the level of premiums you pay.

What Term Lengths are Available for Purchase?

The most popular life insurance terms that are available for purchase span from 5, 10, 15, 20 to 30 years. It is important to consider your needs and personal circumstances when deciding the term of coverage for you and your family. Some people may opt for longer or shorter periods depending on the life stages they are in.

Life Insurance States Graph

What Does a 20 Year Term Life Policy Mean?

The “20” in 20 year term life insurance policy means that you will be covered for the first 20 years of the policy. Depending on the premium structure that you have chosen, you have the option to keep the premiums the same throughout the two decades with level premiums. You can also choose stepped premiums (more suitable for short-term policies) or blended premiums (a combination of stepped and level premiums, which are not available with all providers), depending on your needs and requirements.

As an example, if you are 35 years old, married with children, and have a mortgage, you may consider a 20 year term life policy, which will cover you and your family at the time when your financial commitments are the highest until you reach 55 years of age. Once you reach the end of your policy, your children may have moved out of home and you may have smaller amount of debts, as you may paid off your mortgage. At this point of time, you may no longer require the protection of a term life insurance, although you may like to consider a form of protection for your funeral expenses.

How Do You Know which Term Life Insurance You Should Choose?

Many people are surprised at how affordable life cover can be, but the question that is often asked is how long an appropriate term of cover is – is 5 years too short or 30 years too long? In order to answer that, there are certain factors that you may need to consider:

  • Your age. Your life insurance needs will differ depending on the life stage you are currently in. If you are in your early 20s or 30s, you may like to consider a longer period, such as 20 year term life policy, to cater for future events and commitments (having a family or buying your first home. However, if you are in later stages of life, your needs for life cover may not be as substantial as those who are in their 20s and 30s and thus require less coverage for a shorter period of time.
  • What is your current financial situation like? If you are just starting to build your career, you may not have a lot of disposable income and you may think that you cannot afford expensive life insurance premiums. However, when you purchase life cover when you are young and healthy, your premiums will be cheaper compared to buying it when you are older. Consider blended style premiums which incorporate stepped premiums for the first 10 years of your policy and level premiums for the remaining period of the policy.
  • Do you have long-term debts? Meeting the repayments of your debts and other financial responsibilities are important, especially to your family. So, if you suddenly die or only have a few months to live, can you guarantee that your loved ones will be able to cope with all the debts and living expenses? Will the family’s savings be enough to cover for other expenses and payments?
  • The age of your children and their education expenses. If you are a parent, your children’s well being is a priority. Therefore, it is essential to consider how your surviving partner/spouse can meet the costs of your children’s education if you are no longer around. When you have young children, 20 year term life policy is beneficial as it will protect your family at a time when they are most vulnerable if you were to die prematurely.

While it may be difficult to determine an appropriate term of cover, it is important to think long and hard into the future when you make your decision. Consider every aspect of your present and future financial obligations and how it will affect the people that you care about (those you consider as your financial dependants) in the event of your death, especially if you are between the age of 25 to 35. This is when 20 year term life insurance can provide the most benefit.

Why Should You Consider 20 Year Term Life Policy and Not 10 or 30 Year?

Why 20 years? How is it different than 5 years or 30 years? For many reasons, which can be found from the following:

  • Provision for coverage during a critical period: Although 5 or 10 year policy is much cheaper compared to 20 year policy, the latter will provide you with more coverage, especially at a time when your financial commitments are highest. If you have children going to University within the 20-year period, you want to ensure that they will get the best education no matter what happens to you.
  • Options to increase cover at significant life events: Any policies will feature Guaranteed Insurability Option, which will allow you to increase the level of cover when new obligations arise without having to undertake further medical testing. Life events often include (but not limited to):
  • Getting married
  • Birth or adoption of a child/children
  • Taking out a mortgage
  • Buying a house
  • A dependant child starting secondary school
  • Taking out a business loan
  • Increasing an existing business loan
  • Divorce
  • Death of a spouse/partner

Rob: Why Choosing 20 Year Term Life Insurance was a Good Decision

Rob was 32 years old and owned a cafe business in Sydney. He took out term life insurance just two years ago when he secured a loan to start up his business. With the advice of an insurance adviser, he decided to opt for a 20 year term life insurance policy to cover his long-term debts (business loan and mortgage) and his young family, as he had just gotten married to Rachel, 30, who was pregnant with their first child.

With a very successful run of the cafe, he decided to expand his business a few years later. He applied for an increase in his existing business loan so that he could open up a new restaurant (bistro). At this point of time, Rob and Rachel had just welcomed the birth of their second child.

With 20 year term life policy, despite of Rob’s changing circumstances, he had the peace of mind of being able to increase the amount of his life coverage, especially when he had taken on more debts and with a family that was still growing. If anything should happen to him, the term life insurance would be enough to cover all the debts, provide for the family’s living expenses and the children’s education expenses until they finish University.

Do I Need to Take a Medical Exam to Purchase 20 Year Term Life Insurance?

Contrary to the popular belief, most life insurance applications in Australia may not require you to complete a medical exam. However, if a medical exam is required when you apply for 20 year term life policy, it could be due to a number of reasons:

  • Disclosure of a pre-existing medical conditionThis is one of the major reasons why a medical exam may be required by the insurance provider. Pre-existing medical conditions are not always grounds for applications being refused and medical exams are requested so that the insurer can find out more information on the condition.
  • Your age at the time of applicationIn general, the older you are, the higher the likelihood that you are required to take a medical exam. Most applicants are more likely to be prone to serious medical conditions later in life.
  • When a high amount of insurance is needed while the amount that constitutes as “high” will differ between insurers, they will generally request for a medical due to the increased risks that they may have to take on with significant amounts of coverage.

When you are required to complete a medical, there should be very little to worry about if you have been completely honest in your application. Medical underwriting requirements vary between providers so if your application is rejected by one provider, it is always worth considering other options.

What Sort of Medical Exams Will I Have to Take?

When applying for 20 year term life insurance policy, you may be required to take the following:

  • Blood test
  • Urine test
  • Blood pressure test
  • Height and weight measurement
  • A check-up by a doctor on a series of questions regarding your medical history

The requirements for a medical may vary depending on the level of risk perceived by the insurance provider. In some cases, a medical report from your doctor will be sufficient for the insurance company or some insurers may use the service of a qualified nurse to visit your home or office to take the tests.

Applicants with severe medical conditions may be required to undertake more comprehensive medical assessment. The life insurance company may nominate to use their own doctors, although you may be able to use your existing doctor depending on the insurer. Depending on the insurer’s reason to request a medical, the specific requirements and tests required may differ between cases.

Purchasing a 20 Year Term Life Insurance Plan: Steps to Success

To buy your life insurance with a 20 year term, follow these simple steps:

steps_in_buying_life_insurance2

What Do You Do with Your 20 Year Term Life Insurance Policy if it is about to Expire?

If you are in your early 20s and you are considering to purchase term life policy, you may want to consider a 30 year term life insurance. It will cover you at the time your financial commitments are the highest and there may be no need for you to renew the policy upon reaching its end date.

If you consider that 20 year term life is a better (and cheaper) option for you and you found that you still have the need for life insurance, as long as you continue to pay the premiums, you can still continue your cover until you reach 99 years of age.

It is worth noting that any applicant considering renewing their policy is required to notify their insurer of any new known conditions that have surfaced since the time of application. Failure to disclose this information may lead to the policy being rejected in the event of a claim.

Having life insurance cover is important because it prepares you against the uncertainties in life. It will not stop the unexpected from happening but it will surely minimise the financials impacts it may have on your loved ones. 20 year term life insurance can provide your dependents with the financial protection that you may need to meet all the expenses that will still accumulate even if you are no longer around. Term life insurance can continue protecting the future of your loved ones that you have carefully built.

[lif_fw title=’Enquire for term life insurance’]

Compare Life insurance quotes from these direct brands

Was this content helpful to you? No  Yes

Ask an Expert

You are about to post a question on finder.com:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder.com provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and Terms of Use.

Questions and responses on finder.com are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site