Well, it happened again, one of the age-old life insurance questions:
How long of a term do I need?
Client asks:
I think the 20 year term makes the most sense with our age and the age of our kids. Does that seem right to you?
Let’s go over the numbers:
Healthy, 43 year-old woman:
Face Value: 20 Year Term: 30 Year Term:
$250,000 $248.05 $386.29
$500,000 $421.11 $683.11
$1,000,000 $758.76 $1,290.17
$2,000,000 $1,419.82 $2,488.98
Relatively healthy, slightly overweight, 44 year-old man:
Face Value: 20 Year Term: 30 Year Term:
$250,000 $497.58 $840.99
$500,000 $916.99 $1,573.23
$1,000,000 $1,661.46 $2,976.05
$2,000,000 $3,217.44 $5846.76
I respond with my own experience:
Yes, I think 20 years is probably fine. It takes your kids through the age of maturity.
I, originally, purchased a 20-year term policy when I had my first born – looking back, I wish I had purchased a 30-year term. This is because after my 20-year term expired, my kids were all still, relatively, young (20, 18 & 16). I then purchased an additional 10-year term which proved more expensive than if I originally purchased a 30-year term.