Narrow down life insurance companies by coverage levels, riders offered, medical exam requirements and more to get a life insurance quote.
You may consider a five-year term life policy for protection during key short-term financial obligations, such as covering a key business partner or using it as collateral for a loan. However, in most cases, a policy with a longer term offers better value and guarantees a fixed cost for longer based on your current health.
Plus, only a handful of life insurance companies offer a five-year term, limiting your policy options. Weigh the pros and cons of this term length and compare policies that offer you the best balance of coverage and value.
Since a majority of insurers don’t offer quotes for a five-year term, expect to pay a higher monthly premium than for a 10-year policy. To help you compare, a 10-year policy costs around $15 per month for a healthy, 30-year-old man or woman.
However, life insurance rates vary, and the premium you pay is based on your age, health, lifestyle, job, medical history and more.
| Age | Man | Woman |
|---|---|---|
| 20 | $4.97 | $4.57 |
| 25 | $4.97 | $4.57 |
| 30 | $4.97 | $4.57 |
| 35 | $5.25 | $4.74 |
| 40 | $5.96 | $5.29 |
| 45 | $7.23 | $6.04 |
| 50 | $9.11 | $6.97 |
| 55 | $11.77 | $8.88 |
| 60 | $17.25 | $11.77 |
| 65 | $31.08 | $17.25 |
| 70 | $50.87 | $26.01 |
*Sample rates sourced from EMC Life Insurance for healthy, nonsmoking men and women. Valid as of January 2021.
Think about whether five-year term life insurance is long enough to cover your financial obligations and whether its cost is worth choosing the five-year term over a longer one like 10 or 20 years. For example, it makes more sense to buy a 10-year policy with a cheaper monthly premium, even if you don’t need protection for that long.
You may want a short-term policy if you’re:
Most people benefit from choosing a term length that’s longer than five years for these reasons.
A five-year policy could cost you $5–$10 per month for a young, healthy person. However, the same person could pay $15 to $20 per month for a $250,000, 20-year policy, which locks in your rate for 15 years longer. Depending on personal factors like your age and health, a longer term could be the cheaper option.
Do the math to determine whether you still need coverage. If you’re under 70 and still have financial responsibilities, you can opt to purchase a new policy before yours expires. It doesn’t have to be a five-year policy; you can choose a longer term or explore annual renewable term insurance, which covers you for a year.
Either way, you’ll have to reapply and prove you’re insurable, meaning you may need to take another medical exam. Your new premium reflects the current market rate and your age and health, so just know that it will be higher. Before signing the dotted line with your current company, it’s a good idea to shop around for the best life insurance rates.
Not many life insurance companies offer five-year terms, possibly because this short term doesn’t span the length of most people’s financial obligations. If you want a five-year term, you’ll have fewer insurance companies to choose from. Fewer choices could mean higher premiums charged or choosing a lesser-known company in the industry.
Consider these options if you have short-term life insurance needs but don’t want to pay for an overpriced five-year policy.
A five-year term life policy may make sense to protect a specific financial obligation like your kids’ college expenses or starting a new business. However, weigh this policy’s cost against the cost and benefit of buying a longer term like a 20-year term life policy. You may find that longer-term policies offer the best value or that you have more choices of reputable insurance companies.
Since not many insurers offer 5-year term policies, check out other term life insurance companies to make sure you’re choosing the right option for you.
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