Quick answer
15-year term life insurance is a policy that locks your premium and death benefit for exactly 15 years. It is the cheapest term length for buyers who only need coverage for a defined 15-year obligation such as a 15-year mortgage payoff or the remaining years a child is financially dependent. A healthy 35-year-old non-smoker can buy a $500,000 15-year term policy for roughly $16 to $22 a month, which is 20 to 40 percent less than an equivalent 20-year term. The policy ends when the 15-year term expires; renewal at age 50 or 60 is typically much more expensive, so 15-year term is best for short-horizon obligations rather than open-ended income replacement.
These policies may be particularly useful if you only need life insurance for a short time or you aren’t sure what your needs will be in the future.
What Is 15-Year Term Life Insurance?
Term life policies provide life insurance during a fixed period known as the term. A 15-year term life policy provides life insurance coverage for 15 years from the date the policy begins, as long as you pay your premiums.
Fifteen years is a relatively short term, and these policies are generally lower risk for insurers. Having a lower amount of risk means these policies often have lower premiums.
You also have the option to purchase term policies for periods of 20, 30, or 40 years. Permanent life insurance, such as a whole life insurance policy, may be another option.
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How Does a 15-Year Term Life Insurance Policy Work?
If you buy one of these policies, you have a fixed premium you’ll pay for the duration of the 15-year term. As with other life insurance policies, the premium amount depends on your health and the policy benefit amount.
You must pay the premiums to maintain active coverage.
If you pass away while the insurance policy is active, your beneficiaries will receive the policy benefit amount, also called a death benefit. Beneficiaries typically do not owe income tax on this money.
What Happens to the Policy at the End of 15 Years?
At the end of the term, the policy will terminate or renew at a much higher rate. You may have the option for a term conversion. Term conversions convert the current policy to one with a longer amount of time, such as 20 or 30 years. You may also be able to convert to a permanent life insurance policy.
Be aware that you may need to take steps to convert your policy before the 15-year term is up. Some policies only allow conversion if you take action years before the policy expires. Examining the term conversion provisions when purchasing your life insurance policy helps prevent surprises later. If you do not know what your life insurance needs will be in the future, you may want to look for a policy with a term conversion option.
Who Is Right for a 15-Year Term Life Insurance Policy?
A 15-year term life insurance policy may be a good option for anyone who is mostly healthy and does not need long-term coverage. An excellent use for these policies is to cover debts upon death, especially for mortgages or car loans.
A 15-year policy can make sense for a young person who does not know what their needs will be later but expects to still be in good health in 15 years. However, you might also select a 15-year term when you are older and need coverage for a few years, such as until you or a spouse reaches retirement age.
Overall, a 15-year term life policy will be cheaper for younger policyholders. The following table shows average estimated rates based on age for a 15-year policy with a $500,000 policy death benefit.
Who Is Right for a 15-Year Term Life Insurance Policy?
| Age | Per Month Premium for Males | Per Month Premium for Females |
|---|---|---|
| 25 | $15 | $15 |
| 35 | $15 | $15 |
| 45 | $40 | $35 |
| 55 | $85 | $65 |
Regardless of the premium, a 15-year policy is not suitable for everyone. A parent with young children may wish to ensure life insurance coverage is available until the children are well-established as adults. You may be worried that your health will get worse in the next decade, making it more difficult for you to get insurance. In these cases, buying a 20 or 30-year policy can be the better option.
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What Is the Cost of a 15-Year Term Life Insurance Policy?
Factors like health, age, and sex can affect your costs. As with any term life policy, you must submit an application. You may need to have a physical or provide medical records. Alcohol consumption and other lifestyle choices can increase your premiums regardless of age or policy term. You will find the following average monthly rates for 15-year term life insurance policies.
For Women:
What Is the Cost of a 15-Year Term Life Insurance Policy?
| Age | $250,000 Coverage | $500,000 Coverage | $1,000,000 Coverage |
|---|---|---|---|
| 25 | $10 | $15 | $50 |
| 35 | $10 | $15 | $60 |
| 45 | $20 | $30 | $115 |
| 55 | $35 | $60 | $245 |
For Men:
For Men:
| Age | $250,000 Coverage | $500,000 Coverage | $1,000,000 Coverage |
|---|---|---|---|
| 25 | $10 | $15 | $50 |
| 35 | $10 | $15 | $60 |
| 45 | $20 | $35 | $135 |
| 55 | $45 | $85 | $245 |
How Does a 15-Year Term Life Insurance Policy Compare to Other Life Insurance Policies?
A shorter policy period means the policyholder is less likely to die while a life insurance policy is active. Short-term policies involve less risk to the insurer, which means these policies have lower premiums.
A male might find the following monthly premiums for a policy with a one million dollar death benefit:
How Does a 15-Year Term Life Insurance Policy Compare to Other Life Insurance Policies?
| Age | 10-Year Term | 15-Year Term | 20-Year Term | 25-Year Term |
|---|---|---|---|---|
| 25 | $45 | $50 | $60 | $70 |
| 35 | $50 | $55 | $70 | $80 |
| 45 | $110 | $135 | $170 | $220 |
| 55 | $240 | $305 | $430 | $560 |
How Can You Get a Quote for 15-Year Term Life Insurance?
Comparing rates online is often the best way to begin shopping for life insurance. You can find out what rates apply to you and which companies might meet your needs.
As with any term life insurance policy, you will submit an application with information about your age and health history. The insurance company may ask you to provide medical records or undergo a physical exam.
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Key Takeaways
A 15-year term life insurance policy is a good option for someone who doesn’t need a long-term policy or isn’t sure what insurance they’ll want in the future. These can be a good option for younger people with changing insurance needs who expect to remain in good health.
Frequently Asked Questions
What is a 15-year term life insurance policy?
A 15-year term life insurance policy locks your premium and the death benefit for exactly 15 years from the policy issue date. If you die at any time during the 15-year term, your beneficiary receives the full death benefit tax-free. If you outlive the term, the policy expires with no payout and no cash value. 15-year term is the second-shortest standard term length offered by most carriers (10-year term is shorter; 20, 25, and 30-year terms are longer) and is priced 20 to 40 percent below a comparable 20-year policy.
How much does 15-year term life insurance cost?
A healthy 35-year-old non-smoking female can buy $500,000 of 15-year term life insurance for roughly $16 to $20 a month at top-rated carriers; the same male typically pays $19 to $24 a month. A 40-year-old non-smoker pays roughly $22 to $30 a month for the same $500,000 of coverage. A 50-year-old non-smoker pays $60 to $90 a month. Smokers typically pay 50 to 200 percent more across all ages. Compare at least three carriers; rates for the same coverage routinely vary 20 to 40 percent between A-rated insurers.
Who should buy 15-year term life insurance?
15-year term is the right choice for buyers with a defined obligation that ends in roughly 15 years. The most common fits are: homeowners with a 15-year mortgage, parents whose youngest child will reach financial independence in 15 years, business owners who plan to retire in 15 years, anyone refinancing the back half of a 30-year mortgage, and buyers who want a lower monthly premium than a 20-year or 30-year term provides. 15-year term is usually NOT the right fit for newborn parents or first-time buyers in their 20s and 30s because the obligation horizon is longer than 15 years.
Is 15-year term life insurance cheaper than 20-year term?
Yes, typically 20 to 40 percent cheaper for the same coverage amount and same buyer profile. The carrier is taking on less risk because the policy is in force for fewer years, so the premium is lower. A healthy 35-year-old non-smoker buying $500,000 of coverage typically pays $19 a month for 15-year term and $24 to $26 a month for 20-year term with the same carrier. The savings increase at older issue ages because the carrier is avoiding the higher-risk years between age 50 and 55.
Can I convert a 15-year term policy to permanent life insurance?
Most A-rated carriers offer a conversion option on 15-year term policies that lets you exchange the term policy for a permanent (whole or universal life) policy without a new medical exam. The conversion window is usually the first 10 years of the term or before age 70, whichever comes first. The new permanent policy is issued at your original health class but at your current attained age, so it costs significantly more per dollar of coverage than the original term. Banner Life, Protective, and Pacific Life have notable conversion provisions; some carriers limit conversion to a specific in-house permanent product.
What happens at the end of a 15-year term policy?
The policy expires with no payout and no cash value. You have three options before expiration: (1) let the policy lapse if you no longer need coverage, (2) buy a new term policy at your current age and health (rates will be materially higher because you are 15 years older), or (3) if your carrier offers it, switch into an annual renewable term continuation that keeps the policy in force at sharply higher annual rates without a new medical exam. Most carriers offer the annual renewable continuation up to age 80 or 95 with rates that double or triple every few years.
Can I get 15-year term life insurance without a medical exam?
Yes. Most A-rated carriers offering accelerated underwriting can issue a 15-year term policy with no medical exam for healthy applicants under age 60. Banner Life ASAP, Protective Velocity, Pacific Life Promise Term, Corebridge Direct, Ethos, and Bestow all offer 15-year term as a no-exam product, typically with face amounts up to $1 million to $3 million depending on the carrier. Decisions are usually returned in 1 to 3 business days, and instant decisions are available from a few carriers for the lowest-risk applicants. Rates are typically equal to or slightly lower than rates from a fully underwritten application for the same buyer.
Is 15-year term life insurance worth it?
Yes, if your obligation horizon is roughly 15 years and you want the lowest possible monthly premium for that horizon. The math works because the policy is significantly cheaper than a 20 or 30-year term and the obligation ends in 15 years anyway, so the longer term length would be wasted coverage. 15-year term is NOT the right choice if your obligation horizon extends beyond 15 years (a 30-year mortgage, young children, a business loan with a long amortization), because buying a new policy at age 50 or 55 to extend coverage is much more expensive than locking a 30-year term at age 35.
Can I get a 15-year term policy at age 50 or 60?
Yes, most carriers issue 15-year term policies up to age 65 and a few extend the issue age to 70. Rates rise sharply at older issue ages because the actuarial risk of death during the term is materially higher. A healthy 55-year-old non-smoker typically pays $110 to $160 a month for $500,000 of 15-year term, compared with about $20 a month at age 35. At age 60 or older, applicants often get a better outcome with a 10-year term or a guaranteed universal life (GUL) policy that locks in lifetime coverage at a fixed premium.
What is the difference between 15-year term and 15-year annual renewable term?
15-year level term has a fixed premium that does not change for the full 15 years. 15-year annual renewable term (ART) has a premium that resets each year to match the policyholder's current age, so the premium starts very low in year 1 and rises annually. Level term is preferred by most buyers because the budget is predictable. Annual renewable term is mostly used as a short-term gap-fill (waiting for a fully underwritten policy to be issued, or covering a one-year business loan). A few carriers offer hybrid products that start as ART for the first 1 to 3 years and convert to level term after underwriting reclassification.
