Most people know at least something about term life insurance. They typically understand that term is the cheapest life insurance available and they understand that it is considered temporary insurance.
Because term life insurance is so affordable, it will usually fit within the budget of most Americans and can be used for many purposes:
- Replacing the income of the family’s primary breadwinner
- Providing coverage for short term purposes like mortgage protection or funding for college and retirement
- Businesses will typically use term insurance for Key Person Insurance and to fund Buy/Sell agreements between company stakeholders.
But, many consumers either don’t know about or forget about the conversion privilege that is generally included in today’s term life insurance policies.
This means the consumer can purchase term life insurance when finances might be limited and then convert that policy to Universal Life or Whole Life down the road when your budget can withstand the additional cost of a permanent product that will last for a lifetime.
Term Life Insurance is a Great Way to Start
Young adults who may have accumulated considerable debt while starting a family typically experience sticker shock when they find that a permanent insurance policy sufficient to cover income replacement and debt reduction is considerably more than they can afford.
An insurance agent who prefers to look out for their prospective client rather than just the commission they’ll earn should always offer term life insurance and then emphasize the conversion privilege when the client’s monthly budget can handle the additional cost for permanent insurance.
The conversation should go something like this: Okay, Sam, according to your insurance needs analysis, you should consider just over a million dollars in coverage to make certain that you can replace your income and leave your surviving loved ones debt-free and a paid-for home.
Since using universal life insurance is not going to reasonably fit in your budget, you can easily afford a 20-year term life insurance policy that we can convert to permanent insurance down the road. At that time, you’ll have substantially reduced your debt and won’t need as much insurance. And, most importantly, when we do the conversion, you don’t have to go through medical underwriting again. Now let’s find which company has the most affordable rates for a 20-year term life insurance policy.
Top 3 Companies for 20-Year Term Life Insurance
Term life insurance is very competitive and independent agents will typically represent all of the most competitive insurance companies so they can deliver the best solution to meet your needs and fit your coverage. As with any product or service, the price should be important, but not the single deciding factor when making a purchase.
Consumers should also consider the financial stability of the company, the company’s customer service reputation, and also the company’s claims service reputation. Here are the top three we recommend and why recommend them (in no particular order).
Protective Life Insurance Company
Besides offering some of the lowest rates for term life insurance in the marketplace, Protective Life Insurance Company meets the important criteria we use when we consider the top three term life insurance companies.
Financial Stability
When it comes to financial stability, Protective Life and their subsidiaries continuously earn very high scores from all of the national insurance rating services:
| Company | A.M. Best | Standard & Poor’s | Moody’s | Fitch |
| Protective Life Insurance Company | A+ | AA- | A1 | A+ |
| West Coast Life Insurance Company | A+ | AA- | A+ | A1 |
| MONY Life Insurance Company | A+ | A+ | – | A+ |
| Protective Life and Annuity Company | A+ | AA- | – | – |
Company Background and Core Values
Founded 1907, Protective Life Insurance Company has grown its footprint throughout the United States by offering a complete portfolio of life insurance and annuity products. The company has a reputation with policyholders and agents of providing outstanding customer service and long with responsive claims service
Actual 20-Year Term Rates for $500,000 face amount for a healthy male and female non-smoker:| Applicant Age | Male Non-Smoker | Female Non-Smoker |
| 25 | $19.58 | $17.10 |
| 30 | $20.00 | $17.53 |
| 35 | $21.29 | $18.38 |
| 40 | $28.74 | $25.10 |
| 45 | $49.07 | $38.47 |
| 50 | $75.24 | $54.87 |
Protective Life is a typical go-to insurance carrier because they will offer insurance coverage up to $50 million and offer a variety of riders that can be added to broaden your coverage and provide living benefits.
AIG
AIG is an enormous company that provides insurance and financial products to a worldwide marketplace. Although they were one of the bailout out recipients shortly after the market crash in 2008, the company has engineered an amazing comeback and generated revenues exceeding $49.5 billion in 2017.
This insurance behemoth actually dropped its roots in Shanghai back in 1919 and has since grown its gigantic footprint in over 80 countries.
Financial Stability
After recovering from the market crash, AIG again ranks near the top or at the top of the four national rating services:
| Rating Service | Rating | Description |
| A.M. Best | A | Excellent |
| Moody’s Investors Service | A2 | Stable |
| Fitch | A+ | Stable |
| Standard & Poor’s | A+ | Strong |
AIG offers a complete selection of life insurance and annuity products and excels in each product category. With their promise of “for nearly 100 years, we’ve prepared you for what’s next in life,” AIG continually provides insurance and financial products that will assist individuals, families, and businesses manage their everyday financial risks.
Actual 20-Year Term Rates for $500,000 face amount for a healthy male and female non-smoker:| Age of Applicant | Male Non-Smoker | Female Non-Smoker |
| 25 | $19.58 | $16.59 |
| 30 | $20.01 | $17.44 |
| 35 | $20.86 | $18.30 |
| 40 | $30.27 | $26.85 |
| 45 | $48.65 | $38.82 |
| 50 | $76.86 | $58.05 |
When you compare 20-year term life insurance rates between Protective Life and AIG, you are bound to notice that in most cases only a dollar or two separates their rates. Suffice it to say that both companies are solid insurers to trust your life insurance with but the deciding factor will always be your circumstances and insurance needs.
SBLI (The Savings Bank Mutual Life Insurance Company of Massachusetts)
Since many insurance shoppers prefer not to go through a medical exam during the underwriting process, we felt it necessary to include SBLI Life Insurance since they have a 20-year term life insurance program where no medical exam or blood/urine tests are required.
After being founded in 1907, SBLI has grown in the insurance industry to become a highly-rated and well-known insurance company that most independent agents are pleased to represent because they are very competitive with their term life insurance product that requires no medical exam or blood/urine tests.
The company has an A rating with A.M. Best rating services and an A+ rating with the Better Business Bureau.
Actual 20-Year Term Rates for $500,000 face amount for a healthy male and female non-smoker:| Age of Applicant | Male Non-Smoker | Female Non-Smoker |
| 25 | $18.56 | $15.57 |
| 30 | $18.99 | $16.30 |
| 35 | $21.68 | $16.92 |
| 40 | $30.30 | $23.68 |
| 45 | $47.63 | $37.46 |
| 50 | $82.33 | $59.41 |
The Bottom Line
The bottom line for consumers who are considering term life insurance is to consider your needs, consider your budget, and if you cannot purchase a sufficient amount of permanent life insurance, take a long look at 20-year term life insurance as a solution that you can comfortably afford and live with.
Frequently Asked Questions
Why would I need a 20 year term life insurance policy?
Some scenarios that may create the need for a 20 year term life insurance policy are:
– Replacing the income of the family’s primary breadwinner
– Providing coverage for short term purposes like mortgage protection or funding for college and retirement
– Businesses will typically use term insurance for Key Person Insurance and to fund Buy/Sell agreements between company
stakeholders.
What are some good insurance companies for 20 year term life insurance?
While price is a big part of choosing a life insurance carrier, consumers should also consider the financial stability of the company, the company’s customer service reputation, and also the company’s claims service reputation. Here are the top three we recommend in no particular order: AIG, Protective Life, and SBLI.
How much would a 20 year term life insurance policy cost?
A sample monthly premium for a $500,000 20-year term life insurance on a healthy 40 year old non smoker would be approximately $30.30 for a male and $23.68 for a female. Your premium will be based on your personal underwriting. An independent life insurance agent can help you determine the best carrier for your needs.
