20 Year Term Life Insurance: How to Decide if it’s Right for You

If you’re shopping for life insurance, you may have compared whole life and term life insurance, and come across 20 year term life insurance. But what is 20 year life insurance, and who should be enrolling in it?

In this article, we’ll go over the costs, rate comparisons, and some of the best companies that offer 20 year term insurance, so you can make an educated decision for whether it’s right for you.

What is 20 Year Term Life Insurance

A 20 year term life insurance policy is a life insurance plan that covers the insured for 20 years.

This plan is great to replace the income of the policyholder should anything happen to him/her during the period that the policy is in place.

This type of term is one of the most popular life insurance policies because it’s more affordable than longer-term policies such as 30 year term and whole life, but still covers the insured over a substantial period of time.

What happens at the end of a 20 year term life insurance policy?

A lot can happen in 20 years – and insurance companies understand that.  Therefore, at the end of the term, many carriers will switch to an annual renewable term policy where the policy can stay in place but with a much higher premium. The premium will be so high that most people will not be able to afford to continue the policy on an annually renewable basis.

You may also have the option to “convert” your term policy to permanent coverage before your term expires. The advantage of converting your term life insurance policy to a permanent policy is that you won’t have to prove that you’re healthy; however, in exchange, the premium will be much higher and based on your new attained age and product type.

The last option is to shop for another term policy; however, your premium will be higher than when you shopped for your first policy, because you will have aged during that time and therefore be at higher risk in the eyes of the underwriter.

Cost of 20 year term life insurance

An insurance carrier will take multiple factors into account when underwriting for a 20 year term policy. Here are some of the factors that will determine your rate:

  • Age
  • State
  • Gender
  • Tobacco Use
  • Family History
  • Health Condition
  • Medication History
  • Death Benefit Amount
  • And many other factors

Learn more: The average cost of life insurance

When it comes to cost, nothing is more influential on the price than your rate class.

The below chart shows the monthly cost of 20 year term insurance for a 40-year old male with a $250,000 death benefit. The only thing that varies is his rate class; depending on which class he’s put in, his monthly cost can vary greatly.

Learn more: What is a rate class

Preferred Best Monthly Rate $ 18
Preferred Rate Monthly Rate $ 23
Standard Plus Monthly Rate $ 29
Standard Monthly Rate $ 35
Preferred Smoker Monthly Rate $ 68
Standard Smoker Monthly Rate $ 91

20 year term life insurance rate chart

In addition to your rate class, your age and gender also play a big role in determining your cost. The rate chart below shows the cost of a 20 year term policy for a male vs. female at different enrollment ages:

20 Year Term, Preferred Best Rates, Non-Tobacco, Male:

Age $250,000 $500,000 $1,000,000
Male – 37 $16 $25 $45
Male – 42 $22 $38 $69
Male – 47 $34 $62 $117
Male – 52 $48 $88 $165
Male – 57 $79 $145 $278

*As of 01/11/2019.

20 Year Term, Preferred Best Rates, Non-Tobacco, Female:

Age $250,000 $500,000 $1,000,000
Female – 37 $13 $21 $34
Female – 42 $18 $30 $52
Female – 47 $25 $44 $80
Female – 52 $37 $66 $122
Female – 57 $58 $103 $200

*As of 01/11/2019.

Should I get a 20 or 30 year term life insurance policy?

One of the most common questions we get from clients is whether they should enroll in a 20 or 30-year term life insurance policy. The answer is, it depends on what you’re planning for the future.

A 30-year term policy is one of the longest term policies available and is a good policy for those who foresee the need for coverage for a longer term. For instance, new homeowners who have a 30-year mortgage would benefit from this policy, as it would last until the debt is paid off.

A 20 year term policy is a good option for those who want peace of mind for the next 20 years, without having to pay the high premium of a 30-year policy.

New families, for instance, 20 years allows enough time for the children to become adults, and to be able to sustain themselves financially in case something were to happen to one of the policyholders. Also, in 20 years your income will (hopefully) be higher. This way once the policy expires and you’re faced with a higher premium, you’ll be better prepared financially to pay for it.

As you can see from the example pricing table below, a 30-year term policy costs more on a monthly basis than a 20-year term policy:

20 year term

$2215monthly
  • Male 36
  • Preferred Plus Rate
  • Non Tobacco
  • $500,000 death benefit

30 year term

$3962monthly
  • Male 36
  • Preferred Plus Rate
  • Non Tobacco
  • $500,000 death benefit

Who are the best 20 year term companies

There is no shortage of life insurance companies that offer a 20 year term. The competition is steep amongst these companies and that is to your advantage. More competition means lower prices. Below is a list of just some of the carriers we represent who offer 20 year term life insurance:

  • Banner Life
  • Prudential
  • Pacific Life
  • Protective
  • AIG
  • Lincoln
  • SBLI
  • John Hancock
  • Ohio National
  • Columbus Life
  • Sagicor

Best Overall

Ohio National is probably the best overall as they have competitive rates and the biggest factor is that they offer 20-year term policies all the way to age 65. You could add Banner, Prudential and AIG to this as well.

Best No Exam

Sagicor is the best company if you are looking for a 20-year term policy that does not require an exam.

How to get the best quotes

While some carriers offer better policies than others, it’s difficult to definitively name one carrier as the best for everyone. Each carrier has their own guidelines on how to determine rate class, and so the best carrier for me may not be the best for you.

The best way to find the right carrier for you is to use our quote engine. Once you fill out the quick form, you’ll instantly be able to compare hundreds of policies from top carriers in a matter of seconds. You’ll also be matched with an Insurance Geek who can help you find the best rates and coverage for your needs. We don’t charge any fees, so what are you waiting for? Get started today.

Want to learn more about term life insurance? Compare different policies here