The Gerber Life Parenting Blog

20-Year Term Life Insurance for Families

December 14, 2012

Insurance Coverage for FamiliesNothing is more important than ensuring your family is protected no matter what happens to you or your spouse. Young families are even more at-risk in the event of a loss of one or more parents – particularly because it is during these early years that families develop nest eggs, college funds and money to eventually pass on to heirs.

If you have a whole life insurance policy, chances are the policy will pay benefits to cover burial and funeral expenses, but may do little to provide your surviving family members with a way to replace your income or household responsibilities. That is why many families with children choose to supplement whole life insurance policies with 20-year term life insurance coverage.

Why 20-Year Coverage?
It is during the first two decades of your child’s life that you save for college. Furthermore, according to the U.S. Department of Commerce, the average American is saving approximately 4.8 percent of total income as of 2011. For a family on a single income of $50,000 per year with an 8 percent return, that equates to a savings of more than $122,000 over the course of two decades.

About 20-Year Term Life Insurance Coverage
Purchasing 20-year term life insurance means that, should you be approved for a policy, you will have coverage for 20 years. The plan builds no cash value, like many whole life insurance policies do, but the value of the benefit for term coverage is usually much higher than that of whole life policies. They may be purchased in amounts as low as $50,000 or as high as several million dollars.

Furthermore, 20-year term life insurance rates are determined by your age and health, but are typically lower than the rates associated with longer 30-year terms.

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