15-Year Term Life Insurance: How It Works & Who Needs It
What Is a 15-Year Term Life Insurance Policy?
Term life insurance provides coverage for a set period. Policy owners can choose from many term lengths, ranging from 10-40 years.
How does a 15-year term policy work?
As long as premiums are paid, coverage lasts 15 years
If the insured passes away in those years, death benefits are paid to beneficiaries
Coverage expires if the insured outlives the policy
The owner may be able to renew or convert the coverage at a higher cost
How a Policy Works
Three parties are named on a life insurance policy: the insured, the policy owner, and the beneficiary.
Owner: The policy owner has complete control and authority over the policy and is responsible for paying premiums.
Insured: This person’s life is covered. If they die, the death benefit pays out. Costs are determined by their health and lifestyle.
Beneficiary: The beneficiary is the person or entity who receives the death benefit proceeds if the insured dies while the policy is inforce.
What Happens When the Term Ends?
When the term has expired, coverage ends. However, many term policies offer renewal and conversion options to stay insured.
Renewing your term policy: The renewal option allows you to extend the same term coverage another year without going through underwriting again. Be aware that renewal rates are much higher than your initial level term rates and increase each year you choose to renew.
Converting your term policy: The conversion option lets you change your term coverage into permanent coverage without going through underwriting again. However, converting means you’ll now pay permanent rates much higher than term life insurance.
Who Needs a 15-Year Term Life Insurance Policy?
A term policy that provides coverage for 15 years is an excellent solution in various scenarios:
Newlyweds: As you both navigate career progression, plan for retirement, and foster mutual growth, this policy can provide a much-needed safety net.
Parents: Raising children is no small feat. They’re entirely dependent for decades. A 15-year policy protects their most formative years.
Homeowners: A 15-year mortgage loan is common. With a 15-year term policy, loved ones can remain in your home no matter what happens.
Short-term debtors: Some debt dies with you. Other debts are passed on to your loved ones. The death benefit from 15-year term insurance ensures your debts will be settled.
Business owners: A 15-year term life insurance policy can provide collateral for lenders if you need an SBA loan with a 15-year term.
Learn more about who needs life insurance.
15-Year Term Life Insurance Rates
While the price of life insurance varies for each person, a 15-year term life insurance policy is one of the most budget-friendly options because of the length of coverage.
Term life insurance coverage ranges from 10-40 years. The longer the policy’s term, the higher the premium. Consider the table below. You can see how the term length impacts the monthly rate.
