Who needs a 15-year term life insurance policy?
Term life insurance typically comes in 10, 15, 20, 25 and 30-year term lengths. Find out if a 15-year life insurance policy is right for you and your loved ones.
In the context of term life insurance, time matters. Why? Because term life insurance is premised on a period of time. It provides coverage for a set period of time, which, depending upon which term length you choose, can last until your kids are in college or your mortgage is paid off.
When the term ends, so does your coverage, unless you choose to extend the term, usually at a higher premium. That makes selecting the right time period especially important.
So with a 15-year life insurance policy, you’re looking to provide replacement income to your beneficiaries via a death benefit should something happen to you during the decade and a half that the policy is in force.
In order to make the best decision for you, let’s discuss how to pick the right term length, the four types of people who might need a 15-year term life insurance policy and how much such life insurance coverage costs.
In this article:
What is a term length
There are many choices when it comes time to buy life insurance. One of the initial choices you will make is whether to choose whole life insurance or term life insurance. (More on term versus permanent life insurance policies can be found here.)
Many people opt for term life insurance. Why? Term life insurance is one of the simplest and most affordable types of coverage. It usually comes in set term lengths of 10, 15, 20, 25 and 30 years.
If you know term life insurance is the right choice for you, you’ll need to select a term length, which is, fortunately, simple to do with an online life insurance calculator. The right term length takes into consideration your age, family structure, and debts to keep your loved ones protected during the years they need it most.
4 types of people who might need a 15-year term life insurance policy
Everyone’s financial situation is unique, so how do you figure out how long your term length should be? Take a look at the following types of people who may be good candidates for a 15-year term life insurance policy.
“I have kids”
Raising kids is expensive. How expensive? A 2022 study found that raising a child born in 2015 through the age of 17 will cost a whopping $310,605 … and that does not include college expenses.
If you plan to provide financial support to your kids until they are legally adults or through their college careers, then life insurance can help protect your ability to do so if you were to pass away too soon. If your kids are in elementary school, a 15-year policy can be a great choice to get them off to a great start in life.
Buying a 15-year, $750,000 policy as a healthy 40-year-old woman would start at about $26 per month.
“I have less than 15 years to go on my mortgage.”
Losing a partner is devastating to the one left behind. One thing you can do to help ease the burden is to provide a financial safety net that could help pay your home mortgage in the event of your death.
If you have a 15-year mortgage or less, a 15-year term life insurance policy in an amount that will cover the outstanding balance might make sense. The proceeds from your policy could be used by your partner to help pay the mortgage and other day-to-day expenses while they adjust to their new situation – a welcome reprieve when it is needed the most.
“I’m retiring within 10 to 15 years.”
For many, the goal of a life insurance policy is to replace the income that you contributed to your household if you pass away. As time goes on and your children leave the nest, your mortgage gets paid off, and you’re closing in on retirement, your financial needs may diminish, especially if you’ve set aside a sizable nest egg.
If this sounds like you and retirement is a shining beacon 10-15 years down the road, a 15-year term life insurance policy could work well for you and your family. Keep in mind though, that for some folks, maintaining life insurance into retirement is a good move.
“I plan on being financially independent within 15 years.”
Depending on where you are in life, a 15-year time horizon may end in financial independence for you and your partner. Maybe your plan is to pay off all of your debts and sock away a lot of cash during your prime earning years, leaving you free of financial burdens that you cannot cover. In that case, a 15-year term life insurance policy might be a good option to provide a safety net during your build-up period.
The bonus? Shorter terms such as 15 years typically cost less than longer terms such as 20 or 30 years. Be sure to re-assess periodically in case your plans change over that time.
How much does a 15-year term life insurance policy cost?
Everyone has a budget and everyone likes to keep costs low where they can so let’s get down to some numbers regarding life insurance premiums. How much might a 15-year term life insurance policy cost?
Check out these life insurance quotes for monthly premiums that adults of different ages might pay for different amounts of coverage:
- 15-year, $250,000 policy for a 25-year-old man in excellent health: $9.99 per month
- 15-year, $500,000 policy for a 30-year-old woman in excellent health: $13.11 per month
- 15-year, $750,000 policy for a 35-year-old man in excellent health: $20.36 per month
- 15-year, $1,000,000 policy for a 40-year-old woman in excellent health: $32.94 per month
Estimates based on Haven Term applicants issued by C.M. Life. Pricing differences will vary based on ages, health status, coverage amount and term length. These prices do not reflect the rates for applicants in DE, FL, ND, NY and SD issued by MassMutual.
Speaking of getting down to numbers, how much coverage should you get? To get a baseline, come up with a “personal balance sheet” for your family. You will want to include categories for all of your expenses (mortgage, credit card debt, student loans, Amazon habit, etc.) and your assets (college funds, retirement accounts, savings, etc.).
Any shortfall between the two will be a helpful indicator of how much coverage you need. Also, consider the number of people who depend on you financially and how long they will be in that situation. If you’re not a numbers person, use our life insurance calculator, which will give you an estimate based on the figures you provide.
Is a 15-year term life insurance policy right for you?
Life insurance comes in all shapes and sizes. With online calculators and the ability to complete a life insurance application online, purchasing life insurance has never been easier. (And the cost of life insurance has never been lower.)
Even so, choices need to be made about your policy, including how long the term should be. It’s a big decision because you are buying something that is meant to protect your family financially.
Do a financial inventory of where you are in life … and where you want to be and then take advantage of online resources to determine if a 15-year term life insurance is a good idea for you. No matter which term you choose, you’re doing something important for your family.
About Tom Anderson
Tom Anderson is an award-winning financial journalist whose work has appeared in CNBC.com, Kiplinger’s Personal Finance, Money, Monocle and Wired. He was a 2008-09 Knight-Bagehot Fellow in Economics and Business Journalism at Columbia University.Read more by Tom Anderson
Our editorial policy
Haven Life is a customer-centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.
Our editorial policy
Haven Life is a customer centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.
Our content is created for educational purposes only. Haven Life does not endorse the companies, products, services or strategies discussed here, but we hope they can make your life a little less hard if they are a fit for your situation.
Haven Life is not authorized to give tax, legal or investment advice. This material is not intended to provide, and should not be relied on for tax, legal, or investment advice. Individuals are encouraged to seed advice from their own tax or legal counsel.
Haven Term is a Term Life Insurance Policy (DTC and ICC17DTC in certain states, including NC) issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001 and offered exclusively through Haven Life Insurance Agency, LLC. In NY, Haven Term is DTC-NY 1017. In CA, Haven Term is DTC-CA 042017. Haven Term Simplified is a Simplified Issue Term Life Insurance Policy (ICC19PCM-SI 0819 in certain states, including NC) issued by the C.M. Life Insurance Company, Enfield, CT 06082. Policy and rider form numbers and features may vary by state and may not be available in all states. Our Agency license number in California is OK71922 and in Arkansas 100139527.
MassMutual is rated by A.M. Best Company as A++ (Superior; Top category of 15). The rating is as of Aril 1, 2020 and is subject to change. MassMutual has received different ratings from other rating agencies.
Haven Life Plus (Plus) is the marketing name for the Plus rider, which is included as part of the Haven Term policy and offers access to additional services and benefits at no cost or at a discount. The rider is not available in every state and is subject to change at any time. Neither Haven Life nor MassMutual are responsible for the provision of the benefits and services made accessible under the Plus Rider, which are provided by third party vendors (partners). For more information about Haven Life Plus, please visit: https://havenlife.com/plus
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