Term Life Insurance is considered to be the cheapest life insurance that a person can buy. Because of this, term life insurance is typically the most popular insurance product for young and middle-aged adults. Most insurance shoppers are aware that term insurance can be purchased for up to 40-year terms so it’s logical to wonder why an insurance shopper would opt for 15-year term life insurance.
Who Would Need 15 Year Term Life Insurance?
Knowing that term life insurance is temporary coverage and that it can usually be purchased in policy terms of 10, 15, 20, 25, and 30 years, why would an applicant elect a 15-year policy rather than a 30-year policy? It’s all about time.
When you know that the shorter the term is, the lower your premium will be and if you are buying term insurance to cover specific needs, why would you buy a 15-year term policy? Here are three very good reasons:
Paying for College Tuition
A husband and spouse have two children that they plan to send to college about 14 years from now. Rather than take chances, the couple wants to make certain that if something happens to either one of them, the money will be there if the worse thing happens.
Surprisingly, there are still many young adults out there that will simply not take any chances, especially when it’s very affordable to mitigate the risk of something going wrong. When you know that sending your child to a public college is going to cost about $100,000 for a bachelors degree depending on what program they intend to study in. For this two-child family, they are going to need at least $200,000 and should include additional money because college education costs are not static.
Here is the cost breakdown using a $100,000 15-year term life insurance policy for a healthy male and female non-smoker compared to the same policy for 30 years:
| Term | Applicant Age | Face Amount | Male | Female | Total Term |
|---|---|---|---|---|---|
| 15- Year | 40 | $100,000 | $106 per year | $104 per year | $3,150 |
| 30-Year | 40 | $100,000 | $182 per year | $161 per year | $10,120 |
As you can see, there is a significant saving by purchasing the 15-year term life insurance rather than the 30-year term when you are purchasing term life insurance for a specific need like a college education.
Mortgage Protection Insurance
Not everyone takes out a 30-year mortgage when purchasing a home. In fact, when a 15-year mortgage is used the savings over time can be astonishing when you consider the enormous amount of interest you will not be paying.
This is another very logical reason to use a 15-year term life insurance policy rather than a 30-year policy. Here’s an example:
John and Rebecca are 50 years old and have just purchased their dream home for $500,000. Since the couple invested almost all the profits they made on their previous home, they were able to take out a 15-year mortgage rather than a 30-year mortgage so their home would be paid for when they retire.
Here is the cost breakdown for John and Rebecca using a $400,000 15-year term life insurance policy for a healthy male and female non-smoker compared to the same policy for 30 years:
| Term | Applicant Age | Face Amount | Male | Female | Total Term |
|---|---|---|---|---|---|
| 15-Year | 50 | $400,000 | $49 month | $36 month | $15,300 |
| 30-year | 50 | $400,000 | $109 month | $80 month | $68,040 |
In this example, John and Rebecca will save significant money on their home purchase when you consider the mortgage interest savings and the 15-year term life insurance versus a 30-year term. Also, if either John or Rebecca were to die unexpectedly, the surviving spouse could continue living in their paid-for home.
You’re Retiring in 15 Years
For some people, their intention for buying life insurance is to replace the income the household requires to meet expenses. But as time goes by and the kids have moved out and the home is paid for, and you’re approaching retirement in less than 15-years, the 15-year term life insurance policy is an economical choice, especially since you have permanent life insurance to take you through retirement.
Here is the cost break for a $300,000 term life insurance policy for a healthy male and female non-smoker compared to the same amount of coverage for 30-years:
| Term | Applicant Age | Face Amount | Male | Female | Total Term |
|---|---|---|---|---|---|
| 15-Year | 55 | $300,000 | $57 month | $39 month | $17,280 |
| 30-Year | 55 | $300,000 | $147 month | $101 month | $89,280 |
In this scenario, if the insured(s) chose to retire at age 65 rather than age 70, they would simply cancel their term insurance if they felt it was no longer needed.
How do I get the Best Quotes for 15 Year Term Life Insurance?
In our age of technology, shopping for the best quotes for 15-year term life insurance has never been easier and quicker. Most independent agents nowadays have a website with an instant quote engine that allows an insurance shopper to have a very good idea how much their insurance premium will be.
First, it’s important that you shop with an independent agent like InsuranceQuotes2Day rather than a company agent (captured agent) because an independent agent will shop your business with all of the top highly-rated life insurance companies. With a company agent, shoppers are usually limited to maybe one or two companies.
Since life insurance rates are primarily based on your age and health status, you will never be able to buy term life insurance cheaper than you can today.
Here are actual rates for a $500,000 15-Year Term Life Insurance Policy (popular choice) for a healthy male and female non-smoker:
| Age of Applicant | Male Non-Smoker | Female Non-Smoker |
|---|---|---|
| 25 | $14.76 | $13.32 |
| 30 | $14.76 | $13.76 |
| 35 | $16.88 | $14.95 |
| 40 | $24.50 | $19.95 |
| 45 | $37.92 | $29.06 |
| 50 | $58.89 | $44.63 |
| 55 | $99.00 | $66.75 |
| 60 | $169.81 | $107.70 |
It’s important to note that we are using the rates from SBLI Life Insurance since they do not require a medical exam or blood/urine tests. This means a healthy non-smoker can get a policy issued in a week rather than a month.
In conclusion, having many term selections were you are considering term life insurance essential when your life insurance purchase is for a specific need in your lifetime.
Frequently Asked Questions
How do I find the best price for 15 year term insurance?
It is important that you shop with an independent agent like InsuranceQuotes2Day rather than a company agent (captured agent) because an independent agent will shop your business with all of the top highly-rated life insurance companies. With a company agent, shoppers are usually limited to maybe one or two companies.
Why would I need a 15 year term life insurance policy?
Why would an applicant elect a 15-year life insurance policy rather than a 30-year policy? It’s all about time. You may be retiring in 15 years, have children in college, or need the insurance for mortgage protection. Consult an independent life insurance agent to determine what policy is best for your needs.
How much would a 15 year term life insurance policy cost?
A sample monthly premium for a $500,000 15 year term policy for a healthy 40 year old non-smoker would be around $24.50 for a male and $19.95 for a female. Your rates would depend on your personal underwriting. An independent agent can help you with quotes to determine the best policy for you!
