Considering a 25-year term life insurance policy?
Easy Article Navigation
- What is a 25 Year Term Life Insurance Policy?
- Is a 25-Year Term Life Insurance Policy Right for You?
- 20-Year Term vs 25-Year Term
- 25-Year Term or 30-Year Term?
- How much does a 25-Year Term Life Insurance Policy Cost?
- Best 25-Year Term Life Insurance Companies
- Frequently asked Questions
Although these policy terms will likely accommodate most insurance needs, many consumers would prefer a 25-year term life insurance policy and, therefore, many companies have responded.
Here, we’ll discuss when a 25-year term life insurance policy makes better sense than a 30-year term policy and how it can save you money.
We’ll also take a look at who should consider a 25-year policy term and why they should consider one.
What is a 25 Year Term Life Insurance Policy?
A 25-year term life insurance policy is no different than a 20 or 30-year term policy except for the duration of coverage.
Just like all other term policies, the 25-year term policy will serve the purpose of mitigating financial risk for 25 years.
In most situations when an applicant asks specifically for a 25-year term, he or she has a financial need that is expected to be eliminated in 25 years or less.
For example, if an individual purchases a condo and takes out a 25-year mortgage, rather than a 30-year mortgage, that individual is going to reduce the interest paid on the mortgage and pay less for the insurance that will pay off the mortgage if he or she dies unexpectedly.
Just like other term life insurance products, a 25-year term life insurance policy has a guaranteed death benefit as long as the premium is paid and a guaranteed monthly premium that cannot be increased by the insurance company during the policy’s term.
Is a 25-Year Term Life Insurance Policy Right for You?
There are multiple circumstances when a 25-year term policy makes better sense than a shorter or longer term.
For example, if your budget is extremely tight and you can’t afford a 30-year policy and a more affordable 20-year policy isn’t sufficient for your life insurance needs, a 25-year policy will likely be the way to go.
You might also consider a 25-year term life insurance policy as a bridge until retirement if you are 40 or 45-years old.
The most affordable way to bridge your coverage would be with a lower-priced 25-year policy that you can convert to a permanent policy at retirement when you’ll likely need less coverage but need it for a lifetime.
The conversion clause is extremely helpful because when you convert your policy you will not have to be concerned about any health issues. After all, proof of insurability (in good health) is not required to get the new permanent policy.
20-Year Term vs 25-Year Term
Most individuals who purchase 20-year term life insurance are middle-aged or older and looking to cover the remainder of their working years or mortgage balance.
However, if there are children that will remain in the household for a bit longer than 20 years, a 25-year term policy will typically make better sense.
Moreover, if the children in the household will be college-age in 22 or 23 years, the 25-year term policy would be more appropriate to mitigate that risk.
And, when it comes to a premium comparison between a 20 and 25-year term policy, opting for the additional 5 years of coverage has minimal impact on the rates you’ll pay.
For example, a 40-year old healthy male non-smoker can purchase a $500,000 20-year term policy for as little as $28.00 per month but a 25-year term policy is only about $12 a month more.
25-Year Term or 30-Year Term?
When you consider if a 25-year term or 30-year term policy will best meet your needs, you should always determine the financial risk you are attempting to mitigate and the length of time needed.
Although the monthly premium will be a primary consideration for most applicants, if the policy term you select does not effectively mitigate your financial risks such as paying off a mortgage, paying for college tuition, or funding a retirement plan for your spouse, the monthly premium should be less important.
The priority should be to have a policy in force that will mitigate the risks you identified in the first place should you die during the policy term.
Certainly, having a monthly premium that will fit your budget is critical so why purchase a longer policy term than what you really need?
How much does a 25-Year Term Life Insurance Policy Cost?
In today’s economy, life insurance shoppers benefit tremendously because of the intense competition between life insurance companies who are seeking your insurance business.
Since term life insurance is so popular, the competition is even more intense and the premiums are at an all-time low:
Here are the actual rates for a $500,000 25-year term life insurance policy for a healthy male and female non-smoker.
Age of Applicant Male Non-Smoker Female Non-Smoker
30 $25.37 $21.23
35 $28.93 $25.06
40 $42.29 $33.55
45 $65.93 $50.35
50 $103.28 $79.02
All rates are actual and subject to final underwriting. To get an accurate rate for your actual age, feel free to use our free and no obligation instant rating form on the right side of the page.
Best 25-Year Term Life Insurance Companies
As we mentioned earlier, the term life insurance market is very competitive and as such, there are a handful of companies that are offering incredibly low rates for consumers:
Banner Life Insurance Company
Banner Life, a subsidiary of Legal and General America, is an A+ rated insurer with a COMDEX Score of 94 out of 100.
Banner is a go-to company for LifeInsure.com when we are competing for the best policy with the lowest rates on 25-year Term Life Insurance.
With a century’s worth of experience to guide them, Protective Life continually competes with our lowest price carriers when it comes to 25-year term life insurance.
Protective’s Classic Choice Term continually ranks at the top of the rankings and offers term life insurance that is guaranteed convertible.
Another highly-rated worldwide insurance provider, AIG is a highly competitive contender in the term life insurance market.
AIG’s Select-A-Term product is a go-to product for most insurance brokers because of competitive rates and outstanding customer service.
Founded in 1868, Pacific Life maintains an A+ rating with the national rating services and demonstrates a solid financial position year after year.
The company’s Promise Term product is consistently in our top five list of go-to carriers when we are competing for a 25-year term life insurance sale.
Savings Bank Life Insurance of Massachusetts (SBLI) appeals to the majority of our prospective clients because they typically do not require a medical exam (depending on the age and health of the applicant).
Even though the company does not have the benefit of a medical exam for underwriting, SBLI is still in our top five go-to insurance companies for 25-year term life insurance.
How to get a 25-Year Term Life Insurance Quote
The most efficient and least expensive method of buying a 25-year term life insurance policy is to contact an experienced and reputable independent insurance broker like LifeInsure.com.
Take advantage of our world-class rating technology to get the most competitive term life insurance quotes instantly and with no obligation to buy.
Frequently asked Questions
Question: How does a 25-year term life insurance compare with whole life policies?
If you are looking for an inexpensive way to mitigate temporary financial risks, 25-year term life insurance makes the best sense. If you are looking for lifetime coverage and cost is not a major concern, you’ll probably want to consider universal life or whole life insurance from a mutual company.
What happens when a 25-year term life insurance policy ends?
The majority of the life insurance companies that offer 25-year term life insurance policies will allow a policyholder to renew the policy with annually renewable term life insurance or allow a conversion to permanent insurance when the policy is about to expire.
Does a 25-year life insurance premium increase every year?
In almost every case, the premium for a 25-year life insurance policy remains the same for the entire policy term. The only time a policy would increase every year is if the policyholder renews their policy with annually renewable term life insurance.
Do I have to take a medical exam to get a 25-year term life insurance policy?
Whether a medical exam is required or not will depend on the company you choose and the product you select.