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6 types of people who might need a 20-year term life insurance policy

Term life insurance typically comes in 10, 15, 20 and 30-year term lengths. Find out if a 20-year life insurance policy is right for you and your loved ones.

What kind of person needs a 20-year life insurance term?

It’s not the most common pregnancy story: I was eight months along, sipping water instead of coffee in the conference room, discussing with a financial planner what would happen to my unborn child and me if my husband were to die unexpectedly. Far from as morbid as it sounds, the conversation was actually one that centered around love.

Having a child was the wake-up call that made my husband and I truly understand what it means to look out for each other, for better and for worse. Protecting our financial future — and our new baby’s — brought me far more peace of mind than a prenatal massage.

Sure, planning a honeymoon and assembling a crib with your partner are great. But real love means wanting the best for each other, even if you aren’t around anymore. For many people (including me and my husband), that means figuring out which life insurance policy can help protect your partner’s and children’s financial well-being.

Why do you need life insurance at all?

Life insurance helps financially protect your family from the unexpected.

You and your partner build a life together with dreams of what that life will be. Maybe you see a picket fence and three kids (who will all graduate with honors from the college of their choosing). Perhaps you see yourselves living child-free in a chic big city apartment.

No matter what your dream life looks like, your income helps you afford that future you see. If you die, not only does your family lose a loved one, but they could also lose the ability to afford their lifestyle.

A life insurance policy payout can be a safety net that helps your survivors shoulder the financial burden of your death. The payout itself (called a death benefit) is the amount of money the life insurance company would pay your beneficiaries if you died unexpectedly. Your beneficiaries can use the policy’s death benefit for a number of financial needs – to help cover funeral expenses, meet day-to-day living expenses or plan for the future, to name a few.

It can be comforting to know that you’ve put protection into place to help your loved ones meet their financial needs now and in the future should you no longer be there.

What is a term length?

Term life insurance is one of the simplest and most affordable types of coverage. This type of policy offers coverage for a set period of time: typically 10, 15, 20, and 30 years.

The amount of coverage and term length you choose will have a direct effect on what your monthly or yearly premium will be. We find at Haven Life, an online life insurance agency, that many people purchase term life insurance policies with 20 year term for amounts around $500,000 coverage.

While your financial situation will determine what amount of term life insurance coverage you should buy, factors like the age of your kids, how long you have left on your mortgage, and amount of debt will help determine the length of the term you choose. (Tip: a life insurance calculator can do this math for you.)

But, is a 20-year term life insurance right for you? Let’s find out.

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6 types of people who might need a 20-year term life insurance policy

If you can say yes to one or more of the following statements, the 20-year term length may be your sweet spot:

“I have young kids.”

Life insurance is there to help make sure your loved ones are provided for if you pass away. Many parents hope to financially support their kids into young adulthood or pay for a college education. If your youngest is a toddler, you’ve got about 20 years until his or her college graduation.

“I have less than 20 years to go on my mortgage.”

A life insurance policy that covers the remaining term (and amount) of your mortgage can help your partner continue to afford the mortgage.

“I have debts that will be paid off within 20 years.”

Depending on your state’s laws and the type of debt you carry, your spouse may be responsible for paying other debt you leave behind. The five years of car payments, the credit card debt on a card you share access to, and other debts can add up to a sizable bill for your surviving family to handle alone.

You don’t need to be a breadwinning spouse for this condition to apply to you. People whose parents co-signed on a mortgage may worry about leaving their parents with debt. Couples who maintain separate bank accounts and handle finances independently may still share credit card accounts for convenience or easy transparency, so debt still matters even if your spouse or other family member isn’t financially reliant on you in everyday life.

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“I’m retiring within 15 or 20 years.”

In some cases, a life insurance policy becomes much less important once you’re no longer supporting a family with your income. If your children are financially independent and your spouse could live comfortably off savings and their own Social Security or other retirement income, a life insurance term longer than 20 years might not be necessary. (There are, however, situations where carrying a policy into retirement could make sense.)

“I expect to be self-insured in 20 years.”

Maybe you’re following an aggressive savings and investment plan, living well below your means, so you anticipate having the freedom to work (or not) the way you want after a couple of decades. Maybe you’re the only, beloved grandchild, and you’ll inherit two entire family estates. Sign on for just the term you need.

One of the biggest advantages to term life insurance is that it tides you over to that time when your safety net is in place, for a potentially very low cost.

“I’m on a strict budget.”

A paycheck only stretches so far. Balancing long-term protection against immediate needs can be a challenge for families on a tight budget. A 30-year term length offers more extended protection, but the annual costs can be significantly higher.

A 35-year-old woman in excellent health could buy a 20-year, $500,000 policy starting at $20.32 per month. A 30-year policy with the same details starts at $35.40. Once you weigh protection and affordability, you may decide a 20-year policy is the right choice for you.

How much does a 20-year term life insurance policy cost?

Several factors determine how much you’ll pay for a life insurance policy. Your age, health, and habits like tobacco use affect your life insurance premiums. Costs also depend on how much coverage you need.

Here are life insurance premiums that adults in excellent health at different ages and coverages might pay for a 20-year Haven Term policy as of July 1, 2019:

Source: Haven Life

Not sure how to come up with the coverage amount that’s right for you? Calculate your household expenses, factoring in both debts (e.g., mortgage, credit card debt) and assets (such as retirement or college savings). The number of dependents you have, and the number of years before they’re financially independent, will also give you an idea of how much it will cost to meet their needs. A life insurance calculator can help crunch the numbers, based on the figures you provide.

Is 20-year term length better than 30-year?

When it comes to life insurance, custom-fit is so much better than cookie cutter. All of your plans — kids, projected retirement age, mortgage balance, debt and more — play into how long you need insurance coverage. A 20-year term life insurance policy lasts until young children are grown. It can save you money over other choices, such as a 30-year term length, which may be part of the reason why 20 years is the most popular term length Haven Life clients purchase. A 20-year term life insurance policy is a solid choice for many families and can be one part of a well-planned financial future. Securing precisely the coverage you need is a solid goal to keep in mind when you’re researching insurance policies.

It’s not just easier life insurance, it’s an easier life.

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Jessica Sillers is a writer who specializes in financial services, business, and parenting. She lives near Washington, D.C. with her family. The writer’s opinions are her own.

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About Chelsea Brennan

Chelsea Brennan is the founder of Smart Money Mamas, a personal finance blog that focuses on family finance, investing, and reducing money stress. Chelsea is an ex-hedge fund investor whose work has appeared in a wide array of publications, including Forbes, Business Insider, and more.

Read more by Chelsea Brennan

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.

Our disclosures

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:

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