20 year term life insurance quotes are one of the most popular lengths of term life selected on the market, and for good reason!
Different from 5, 10, or even 15 year, 20 year term life insurance is the product that many people think of when seeking to address the traditional needs of life insurance. A 20 year term is long enough to address most needs while typically maintaining a lower cost than a 30 year product.
As you may already know, the longer the term period chosen, the higher the premium you will be obligated to pay. But, why is this? Simply put, the insurance company assumes greater risk because your odds of death increase over a 20 year period (or a 30 year period) rather than just 10 or 15 years.
Keeping that in mind, 5 year term life insurance is the most affordable type of term life insurance. Conversely, 30 year term is the most expensive. 20 year premiums are a nice balance between these two time periods.
Common Uses for 20 Year Term Life Insurance
Some typical uses for 20 year term life insurance include mortgage protection and income protection.
Example: Let’s assume you have 19 years left on your mortgage. The remaining mortgage balance is $150,000. In the unfortunate event that something befalls you, a properly structured 20 year term life insurance product will help your family to be able to pay off the mortgage. This is a perfect opportunity for a 20 year term life insurance policy.
Example #2: If you are the main bread winner of your family and your wife and children depend on your income, you may be a candidate for a 20 year term plan.
Additional Types of Usage
Because term life insurance is a pure death benefit, its primary use is to provide coverage of financial responsibilities for the insured or his beneficiaries. Such responsibilities may include, but are not limited to, consumer debt, dependent care, college education for dependents, funeral costs, and mortgages.
Term life insurance is generally chosen in favor of permanent life insurance because term insurance is usually much less expensive (depending on the length of the term). Many financial advisors or other experts commonly recommend term life insurance as a means to cover potential expenses until such time that there are sufficient funds available from savings to protect those whom the insurance coverage was intended to protect.
For example, an individual might choose to obtain a policy whose term expires near his or her retirement age based on the premise that, by the time the individual retires, he or she would have amassed sufficient funds in retirement savings to provide financial security for the dependents.
Additional Term Life Insurance Usage Kindly Received from Wikipedia.