The 20 year term insurance policy is one of the most sought after life insurance policies.
It has been sold by life insurance companies for many years and some change in the structure of the policy is very evident when comparing the 20 year term insurance policy of yesteryear to that sold at the present time.
The 20 year term policy is used to protect families as the grow and expand. This policy assures families that spouse and children will be able to continue on even after a breadwinners death.
Business partnerships, sole proprietorships and closed corporations also tend to select the 20 year term life policy.
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20 Year Term Insurance Policy
- The Guaranteed Death Benefit
There is not much change in the death benefit of this policy. It is still level, just like it always has been. That means if you buy a $500,000 20 year term insurance the death benefit is the same at the payment of the first premium as it will be at the payment of the premium in year 10 or year 20. $500,000 will be paid at death. This has always been how the policy worked. The change is in the cost.
- The Guaranteed Level Premium
The premium of the 20 year term life insurance policy used to be structured something like this. With some companies the premium would increase every year for 4 years and thereafter would be level for about 5 year.
At year 10 the premiums may remain level or there may be another increase at year 15. It would remain level to the end of the 20 year period. Some other companies would have a guaranteed level premium for the 20 year term insurance policy but the premium would be so high that buying this policy would be almost prohibitive…
Today the guaranteed level premiums of this 20 year life insurance policy are so low that it seems the insurance companies are making a strong effort to entice you to buy it. As a result the 20 year term life insurance policy is more popular than it has ever been.
- The Conversion Privilege
One of the safety nets of most term life insurance policies is the fact that you can convert the policy to a permanent life insurance policy even if you are in such bad health that for all intents and purposes you are not insurable.
If you did not have an insurance policy, knew you were going to die in the near future, and applied for life insurance you would not qualify for it. If you, however, had a 20 year term insurance policy you could convert it just to be certain you had some life insurance at the time of death…
There used to be more limitations as to when you could convert the policy. In other words some policies had to be converted within 15 years. Today, with most policies, conversion can take effect at any time, as long as the policy is still in force.
- The Waiver Of Premium Rider
The waiver of premium rider is still available. This simply states that if you should become disabled, anytime after 6 months of disability, the life insurance company will step in and pay your premiums for you.
You don’t have to pay any premiums for as long as you are disabled, even if it is for the rest of your life. The premiums for this rider are very minimal.
- The Accidental Death Benefit Rider
You can also add the accidental death benefit rider to your policy. If you should die in an accident the life insurance company will pay the death benefit times two to your beneficiary. This rider is a little more pricey than the premium for the waiver.
The life insurance companies have certainly stepped up to the plate with this one. Check out the 20 year term insurance policy.