20-year term life insurance policies

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

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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.

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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. 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.

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

Gender
Age
Average monthly rate
Male
25
$14.55
Male
30
$14.84
Male
35
$15.65
Male
40
$20.85
Male
45
$30.96
Male
50
$46.30
Male
55
$72.32
Male
60
$126.03
Gender
Age
Average monthly rate
Female
25
$12.73
Female
30
$13.13
Female
35
$13.99
Female
40
$18.23
Female
45
$30.96
Female
50
$35.82
Female
55
$54.42
Female
60
$91.59

Sample rates for a smoker in great health:

Gender
Age
Average monthly rate
Male
25
$42.99
Male
30
$46.89
Male
35
$54.07
Male
40
$76.75
Male
45
$122.53
Male
50
$184.14
Male
55
$280.83
Male
60
$453.27
Gender
Age
Average monthly rate
Female
25
$35.44
Female
30
$39.20
Female
35
$45.51
Female
40
$61.02
Female
45
$90.45
Female
50
$132.89
Female
55
$194.53
Female
60
$301.31
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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.

See the probability of passing away within 20 years for those aged between 30-50

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. These are some common reasons to purchase this policy:

  • To protect your income. Do you have dependents relying on your income? A 20-year policy can protect your family and give them the money they need to cover their living expenses if you die prematurely.
  • To pay off debt. If you do the math and figure out you have 20 years left before you’re debt free, consider taking out a 20-year policy. That way, your family won’t be burdened with those repayments if you pass away.
  • To cover your kids’ college costs. Most parents purchase a policy that covers their kids through college, when they start working and earning money themselves. If you’re a young parent, you could take out a 20-year policy that expires around the time your kids graduate.
  • To plan for retirement. If you’re around 20 years away from retirement, a 20-year policy could secure your income should anything happen to you. At this stage of your life, you’re probably working your way up the career ladder and building your wealth.
  • To secure a loan. If you’re hoping to take out a personal or business loan, you can secure it with a life insurance policy. This reassures lenders that you have every intention to pay back the money, even if you die.

What happens if my policy expires?

Your coverage expires with your policy. At that point, 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. 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 are ideal for people who want to treat their life insurance as an investment.
  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.

Life insurance companies that offer a 20-year term policy

Name Product Issue Ages Coverage Range Medical Exam Required State Availability
LadderLife™ Life Insurance
20 - 60 years old
$100,000 to $8,000,000
No
Not available in New York
Term life insurance with no policy fees and the freedom to cancel anytime. Simple application process that can get you approved for coverage instantly.
Bestow
21 - 54 years old
$50,000 to $1,000,000
No
Not available in New York
Affordable 2-, 10- and 20-year term life insurance policies. Instant quotes and no medical exams.
Quotacy
18 - 80 years old
$50,000 to $25,000,000
Depends on provider and policy
All 50 states and D.C.
Get a quote within minutes from more than a dozen insurers.
Sproutt
18 - 100 years old
$50,000 to $3,000,000
No
Nationwide
This life insurance broker combines technology and the human touch to match you with a policy tailored to your needs.
AIG
AIG
20 - 85 years old
$100,000 to $2,000,000
Depends on policy.
Products and product features may not be available in all states.
This well-established life insurance provider could offer you $250,000 worth of coverage for as low as $14 per month.

Compare up to 4 providers

Bottom line

Twenty-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.

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