Long Term Life Insurance

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The following is a guest post.

Long Term Life Insurance
Term life insurance is available in a variety of terms to suit the needs of different individuals. Some terms may be as short as 3 months, while others are more than 30 years. Although long term life insurance policies are temporary, they can cover the time when most individuals have the greatest need for life insurance, which is when children are dependent on parents’ income. A parent’s 20 or 30 year term life policy will provide financial protection for children from infancy to adulthood.

Long Term Life Insurance Policy Rates

Because term life insurance rates are largely based on the insured person’s age over the term of the policy, long term policies have higher rates than short term policies. A 20 year old will be 50 when a 30 year policy expires. 50 year olds pay higher life insurance rates than 20 year olds and the rates over the term of the policy are averaged to take this into account. During shorter policy terms, policyholders age less so the rates are lower.

Long Term Life Insurance vs. Permanent Life Insurance

Permanent life insurance policies, like whole and universal life, do not expire and guarantee payment of the death benefit, but the rates are substantially more than long term life insurance rates. If the insured person outlives the term of his or her policy, no benefits are paid, and the company keeps all the premiums. Since not every policyholder will collect benefits under his or her policy, it is possible to keep term life rates low while providing the same coverage as permanent life insurance, but for only a limited time.

Return of Premium (ROP) Term Life Insurance

Those who would like the cash value feature of whole or universal life insurance but find the premiums too high can consider a return of premium long term life insurance policy. If the insured person outlives the term of the policy, the company refunds all of the premiums plus interest in a lump sum. While this differs from cash value since the insured cannot take money from the policy while it is still in force, ROP long term coverage can be used in financial planning like whole or universal life.

Why Choose Long Term Life Insurance?

Life insurance rates are based on the age of the insured person over the term of the policy, and the older the policyholder is when the policy is purchased, the higher the rates will be. The cost of 3 – ten year term life policies will actually be more than the cost of a single 30 year term life policy. Once a long term life policy is issued, the rates are locked in for the entire term even if the cost of administering policies increases. If the need for life insurance protection is long term, then a long term policy offers the best value.

Term Life Insurance Companies



Virtually all life insurance companies offer term life insurance policies, but some companies specialize in term life. Term life insurance is temporary life coverage that expires at the end of a pre-agreed term. If the insured person does not die during the term, the policy expires, no benefits are paid and the term life insurance company keeps the premiums. There are two types of term life insurance companies, privately held and mutual companies.

Mutual Life Insurance Companies

Mutual term life insurance companies are owned by the policyholders. Management of these companies answers directly to their customers, because every customer is also an owner. Daily operations of mutual companies do not differ significantly from those of privately held companies, but profits made by the company are used to lower premiums or pay dividends to policyholders, not stock owners. Good management in mutual companies benefits the policyholders directly.

Privately Held Term Life Insurance Companies

Privately held life insurance companies issue stock which is purchased by investors. The investors may not have a life insurance policy with the company, but they own a percentage of the company through stock ownership. Privately held term life insurance companies have the advantage of being able to raise more cash from investors for acquisitions and growth than mutual companies. Management of privately held companies must answer to their stockholders and policyholders are customers for their product.

Which Type of Life Insurance Company Is Better?

From the standpoint of customer service and price, there is little difference between mutual and privately held companies. The daily operations of their service departments are identical and the real differences are only apparent on the upper management level. Privately held companies must hold stockholders meetings and investors vote on major management decisions. In mutual companies, policyholders may be notified of impending changes in the company structure.

How To Get Information On A Company’s Reputation

Since many term life insurance policies are long term contracts, smart consumers get information about insurance companies before making the purchase. Four major consumer agencies offer rankings for term life insurance companies including AM Best and JD Powers. To check the financial stability of a company, potential policyholders can ask for a copy of the company’s financial prospectus. The state department of insurance or Better Business Bureau can advise consumers of any customer complaints or litigation against a company.
Most term life insurance companies are well established firms that offer a quality product. Whether an individual chooses a mutual or privately held company is a matter of personal preference since both types of companies offer excellent service and affordable prices. Consumers should check the reputation of any life insurance company before entering into a contract since it is important to choose a provider that will be there if a family needs them.

Life Insurance Quotes

Consumers can compare the rates of long term life insurance policies by requesting life insurance quotes online. The individual submits basic rating information like age, gender and occupation and chooses the type of life insurance and death benefit amount. The site provides long term life quotes from multiple top ranked insurance companies so consumers can compare costs and find the best policy at the best possible price.

How about you all? Do you prefer term, whole, or universal life insurance plans? Why?

Share your experiences by commenting below!


  1. It’s hard to say that term, whole, or universal life insurance plans are the best. Each individual’s physical and financial health will point them in a particular direction right for them. That being said, it does seem that term life suits a large portion of the population.

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