15 Year Term Life Insurance | Benefits of a 15-year Term Life Insurance Policy

15-Year Term Life Insurance

Term insurance policies offer financial protection to the family of the life assured on her/his untimely death while the policy is in force. Such policies only cover policyholders for a specific term, usually ranging from 10 to 40 years. As the name indicates, a 15-year term life insurance policy offers life insurance protection to the policyholder for 15 years. Let's understand more about such policies and their significance.

What Is a 15-Year Term Life Insurance Policy?

15-year term life insurance offers pure risk coverage against the life of the policyholder for a policy term of 15 years. If the life assured happens to die under unfortunate circumstances within this period, the assigned nominees are eligible to claim the death benefit amount. The only condition to receive the entire benefit amount is that all due premium payments need to have been made in full. A 15-year term insurance policy can act as an effective risk management strategy to help you create a financial safety net for your family, that they can fall back on in your absence.

If the life assured survives the maturity of the policy, that is 15 years from the date of risk commencement, no benefits are payable by the insurer. Let's briefly look at the benefits of purchasing 15-year term life insurance.

Benefits of a 15-year Term Life Insurance Policy

Affordable Coverage

Given that the period of coverage is shorter than standard longer-term insurance policies, you get comprehensive comparable coverage at significantly lower premiums.

Short-Term Obligation

15 years is a fairly reasonable time frame to make regular premium payments if you aren’t a stickler for long-term commitments. You are not likely to feel burdened with managing other financial obligations along with these payments.

Future Financial Needs

If you have a child, a 15-year term insurance policy can help your spouse take care of his/her growing educational pursuits with the benefit amount on your death. The amount can also help settle outstanding debts or plan for other aspects.

Income Replacement

If you are the only earning member of your family, proceeds from your death benefit amount can act as a source of income for them should anything were to happen to you in these 15 years of coverage.

How Does 15-Year Term Life Insurance Work?

In the policy term of 15 years, you are liable to pay regular premiums as per the mode of payment chosen (monthly, quarterly, half-yearly, yearly). Regular premium payments will make sure the benefits are active and the policy is in force. If you happen to die during these 15 years, the nominees assigned by you can claim the death benefit payout. Upon successful verification, the insurer makes a lump sum payout of the benefit amount or in installments, as per the terms of the deceased policyholder.

If, however, you survive the policy term of 15 years, you or your beneficiaries cannot claim any benefits. This is why such plans are known as pure risk protection plans. You can choose to renew your existing policy. However, renewal of a policy may require you to undergo a medical check-up depending on your current age.

Factors to Consider When Buying 15-Year Term Life Insurance

Before you go ahead and purchase a 15-year term plan, make sure you have taken into consideration the following factors:

Family Size - The larger your family, the bigger should be your coverage amount. The age of the dependents in this case also matters. Make sure that the benefit amount can cover the needs of each member.

Age Of The Insured - Remember that term insurance gets pricier with age owing to increased mortality risks.

Income - The more your annual income, the more premiums will be charged by the insurer. However, with more income, you can also secure a comprehensive cover amount. Make sure that both the premiums and the sum assured are in tandem.

Cost Of Cover - Create a financial profile of your assets and liabilities and make sure insurance premiums are not proving to be a burden on top of all the expenses. Using online calculators with personalized inputs can help you figure out the most optimal solution.

Financial Responsibilities - Financial responsibilities change with time and age. The coverage amount should reflect the both current and future financial needs of the family. As such, factor in the rate of inflation before deciding on the sum assured.

FAQ's

Does it make sense to purchase a 15-year term insurance policy instead of a whole life cover?

Ans. Whole life insurance is long-term cover and requires longer premium payments. With a 15-year term life policy, you can the same coverage at much lower premiums. However, the latter is purely risk-based and does not come with a savings avenue, unlike accumulating wealth in a whole life cover. You need to carefully assess your needs and constraints to make the best decision. Remember that insurance in any form is an invaluable asset to have.
Can I extend my 15-year term insurance policy?

Ans. You can renew your existing policy or even convert it to a whole life policy. However, the terms and conditions vary across insurers.
Do premiums for my 15-year term life insurance policy keep increasing every year?

Ans. Premiums only increase if you opt for an increasing term life insurance policy. If you currently possess a 15-year level term life insurance policy, you can rest assured that the premiums won’t increase.
Are medical check-ups mandatory to purchase a 15-year term life insurance policy?

Ans. Mostly, insurers will ask you to undergo standard tests to establish and insure ability. Based on your age and medical history, premiums are decided upon.