Why Twenty Year Term Life Insurance Is the Most Popular
October 15, 2024 | Johanna Karlsson
Life insurance can provide financial security in the unfortunate event of the policyholder’s death. Purchasing these policies is only getting more popular as a recent study revealed that a historically high percentage of consumers (39%) planned to buy life insurance within the next year, according to LIMRA. Among these policies, term life insurance has been a popular choice for consumers seeking affordable and straightforward coverage, with the twenty year term life insurance policy being an attractive option for many policyholders. This specific duration policy balances long-term protection and manageable premiums, making it an affordable and comprehensive choice for consumers in their prime working years looking to secure their family’s financial future.
As the name of the policy suggests, a 20-year term life insurance policy is a type of life insurance policy that provides coverage for a fixed period of 20 years. If the insured person passes away, the policy pays out a predetermined death benefit to the designated beneficiaries during this time. The key feature of this policy is that the coverage remains in effect for exactly 20 years from the date of purchase, as long as the premiums are paid on time. The policy expires once the 20-year period ends, and there is no payout if the insured person dies after this point.
Why Do Most People Choose 20-Year Term Life Insurance?
The popularity of 20-year term life insurance can be attributed to its alignment with major life milestones and financial obligations. For many individuals in their 30s or early 40s, this timeframe coincides with raising children, paying off a mortgage, and building career stability. A 20-year policy provides coverage through these critical years, ensuring that dependents are protected until they become financially independent or major debts are paid off. This duration often sees policyholders through their peak earning years, offering peace of mind during a period when the financial impact of losing a breadwinner would be most severe.
The cost-effectiveness of 20-year term policies contributes significantly to their appeal. Compared to longer terms or permanent life insurance plan options, 20-year terms offer relatively low premiums while still providing substantial coverage. This affordability allows individuals to secure higher death benefits, often hundreds of thousands or even millions of dollars, at a fraction of the cost of whole-life policies. The fixed-term nature also provides clarity and simplicity, with policyholders knowing exactly how long they’re covered and how much they’ll pay throughout the policy, making it easier to incorporate into long-term financial planning.
What Happens to Term Life Insurance After 20 Years?
The life insurance coverage typically expires after a 20-year term life insurance policy reaches its end date. This means that the policy no longer provides a death benefit, and the insurance company is not obligated to pay out if the insured person passes away after this point. The policyholder stops paying premiums, and the contract ends between the insured and the insurance company. Unlike whole life or universal life insurance, term life insurance does not accumulate cash value, so there is no payout or refund of premiums when the policy term ends.
However, as the policy nears its end, many insurance companies offer the ability to renew it for another term, though usually at a higher premium due to the insured’s increased age. Some policies include a conversion option, allowing the policyholder to convert their term policy into a permanent life insurance policy without undergoing a new medical examination.
Can I Sell My 20-year Term Life Insurance Policy?
Generally, 20-year term life insurance policies cannot be sold in the same way that permanent life insurance policies can be sold through life settlements. This is because life settlement companies typically aren’t interested in purchasing term policies because there’s no guarantee of a payout, and the policies will expire at a predetermined date. Most policyholders should not expect to be able to sell their 20-year term life insurance policies. Instead, they should view these policies as protection for their beneficiaries rather than as assets that can be liquidated.
Buy Twenty Year Term Life Insurance Leads From HealthPlusLife
HealthPlusLife is here to support life insurance agencies looking for viable lead sources and marketing strategies. We help agencies develop effective digital marketing strategies and lead-generation campaigns to reach more consumers and increase revenue. Our life insurance leads can be screened to find consumers actively looking for twenty year term life insurance policies. Please contact HealthPlusLife at 888-828-5064, TTY 711, today to learn more about how we can help your insurance agency’s lead generation and digital marketing efforts.
Johanna Karlsson Johanna Karlsson is a veteran health and life insurance professional licensed in 50 states. She relocated from the countryside in the south of Sweden and has not looked back. After coming to the United States to attend university, she gained her degree in Public Relations. She brought her public relations skills to a local international health insurance where she discovered a new passion in insurance. After years with that company, Johanna now joins HealthPlusLife to help build a team of licensed insurance agents ready to meet your insurance needs.
