15-Year Term Life Insurance

If you’re considering life insurance but would prefer not to pay the high premiums associated with permanent policies (whole life and universal life), cost-effective term life insurance may offer a solution. More specifically, a 15-year term policy from Guardian or another reliable life insurance company can provide cost-effective coverage for your prime income-earning years, until your children are on their own, or until you’re no longer responsible for financial obligations such as a mortgage or college tuition. So, take a minute to learn:

• How 15-year term life insurance works

• The pros and cons of 15-year term life insurance

• Whether a 15-year term policy may be right for you

What is 15-year term life insurance?

15-year term insurance provides life insurance coverage for 15 years. If the policyholder passes away during the 15-year term, their beneficiaries will receive a death benefit to help them handle everyday expenses and major financial obligations. This death benefit is distributed in a lump sum and is income tax-free.¹ Should you require a shorter or longer coverage period, other popular terms include 10, 20, and 30 years. (In general, the shorter your policy’s term, the lower the insurance cost.)²

Here's how 15-year term life insurance works

15-year term life insurance is relatively straightforward. When you apply for a policy, you’ll go through an initial underwriting process, which may include:

• A quick medical exam, including bloodwork and vitals.

• A thorough screening of your current lifestyle.

• A medical questionnaire that assesses your overall health.

Once you’re approved, you can receive insurance quotes for term life policies. Costs are determined by policy length, amount of death benefit, and your:

• Age: The younger you are, the lower your premium is likely to be

• Gender: All else being equal, women often have slightly lower premiums than men³

• Health history: Existing conditions or family history of certain high-risk genetic conditions can increase your risk, and thus your premium

• Lifestyle: Smoking will increase your monthly premiums, as will high-risk hobbies like skydiving or high-risk careers like working on an oil rig

If there’s a policy that meets your coverage needs and your budget, you can ask about optional “riders," which provide additional features or benefits at additional cost, or move forward with your purchase.⁴ In most cases, your policy will become active as soon as you make your first premium payment. (However, there may be a waiting period for specific causes of death like suicide.)

At the end of the 15-year coverage period, your policy expires. You will no longer need to pay premiums, but you will no longer have any life insurance coverage. If you wish to be covered moving forward, you may have a few options:

• You may be able to renew your policy on a year-by-year basis, although you’ll no longer be assured of enjoying the same premium you were paying before.

• You may choose to take out a whole new term policy, although it will probably cost you more than the one that expired.⁴

• If your policy includes a conversion rider, you’ll be able to convert the term policy into a permanent (whole life or universal life) insurance policy, although your insurance rates will probably increase significantly.

When is a 15-year term policy a good choice?

A 15-year term policy is relatively short-term compared to a 30-year term or whole life policy, but it can cover a good portion of your top income-earning years.

15-year term policies may be a good choice if you want to:

• Make sure your dependents have financial protection in the event of your death during peak earning and spending years

• Help ensure your dependents’ financial confidence until they are free of major obligations such as a mortgage or college tuition payments

• Protect a spouse or partner by leaving a legacy that they can use during retirement

If, for example, you have 15 years left on your mortgage, a 15-year term policy could help your partner stay in your home in the event of your untimely passing. Or, if you have 15 years until your children complete college, a 15-year term policy could ensure that their needs will be met until they’re able to enter the workforce themselves.

Here’s what a 15-year term life insurance policy might cost

As reported in Guardian’s 12^th Annual Workplace Benefits Study, there’s a common misconception that term life insurance is expensive, with 80% of Millennials overestimating the cost, and 35% forgoing it entirely because they believe it’s unaffordable.⁵ In reality, term life policies come in a variety of different coverage options that can fit into your budget.

That said, insurance costs for a 15-year term policy will vary significantly based on several factors, including the amount of coverage (death benefit), your age, health, gender, and lifestyle. For example, a 30-year-old female non-smoker with no pre-existing conditions will have much lower premiums than a 45-year-old man who smokes and has high cholesterol.*

Here’s a breakdown of average monthly premiums for 15-year term life insurance policy⁶:

A few more key facts about costs. Typically, 15-year term policies will cost more than 10-year term policies but less than 20- and 30-year term policies. Also, while the cost per $1,000 worth of coverage increases with longer term lengths, it’s important to keep in mind that premiums can increase significantly with age. As a result, in the long run, it may be cost-effective to buy a 30-year policy instead of two consecutive 15-year policies.

The bottom line is that even term policies can be a bit complicated. So, it’s important to understand your options and review them with a financial professional or insurance agent before you make any decisions or buy a life insurance policy.

15-year term life insurance vs. other types of policies

Term life insurance policies have a few key differences from permanent policies like whole and universal life insurance.

• Coverage duration: Term insurance provides coverage for a specific period (like 15 years), while whole life insurance covers you for your entire life.⁷

• Cash value: Whole life insurance builds cash value on a tax-deferred basis, and many people consider it a great savings tool. Term life does not build cash value.⁸

• Premiums: Permanent life insurance policies typically have higher premiums. Term life is generally more affordable.⁹ Whole life premiums remain level for life, while term life premiums are fixed during the term but may increase if you renew.

• Payout: Whole life insurance guarantees a death benefit payout no matter when you pass away, but term life only pays if you pass away within the term.

The pros and cons of 15-year life term life insurance policies

A 15-year term insurance policy offers these key benefits and advantages:

• Cost-effectiveness: Compared to 20-year and 30-year term policies and permanent life insurance,15-year term policies are cost-effective.

• Fixed premiums: Premiums are almost always “level,” meaning they remain the same throughout the 15-year term. This allows for predictable budgeting during the policy’s duration, although premiums will probably increase if you renew down the line.

• Simplicity: 15-year term insurance is easy to understand and straightforward, with no complex cash value components or loans to account for.

• Flexibility: You're not locked into a long-term commitment, but you may be able to convert to a permanent life insurance policy without the need for a medical exam.

However, there are also some drawbacks:

• Shorter-term life insurance protection: 15 years is a relatively short period, and may not cover all of your peak earning years if you’re under age 45.

• Higher long-term costs: A 15-year term policy almost always has lower monthly premiums than a 20- or 30-year term policy. However, if you decide to apply for a new policy when your 15-year policy expires, your overall cost for the two consecutive policies will almost always be higher than it would have been for a single 30-year policy.

• No cash value: Term insurance policies don’t build cash value.

Guardian can help

A financial professional can explain your insurance options and help you determine what type of policy, level of coverage, and term length may best align with your needs and budget.

If you don’t know a financial professional, ask your friends for a recommendation – or click below to find a Guardian financial professional in your area.

Remember, the younger and healthier you are, the less your policy may cost, so the best time to start is today.