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Whole Vs Term Life Insurance

A blog about life learning and choosing about the different types of life insurance available for consumers. The World of Life Insurance is Complex - Don't Get Lost. Learn, Explore, Choose, and Work with Someone you Trust.

Do We Now Need a 35 Year Term Life Insurance Policy?

Scott Scott , 7/11/2018
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Although the latest data on American lifespans has gone down a smidgen in the past two years, over all - Americans are living longer, much longer.  On Average Americans are living till age 78.6 years.  Living over seventy years on average is providing all sorts of financial changes in our society, number one being the increased need for increased retirement savings and potentially longevity insurance.   However one other consideration is the need for life insurance for longer periods of time.

In my experience as an Insurance Agent - the twenty year term policy is typically been the most popular term product length considered by clients.  However, I have also seen increased interest in the thirty year life policies.  These policies are really extremely helpful for clients that wish to secure life insurance at a young age and who have not yet had children but plan to do so.  There are of course numerous other reasons for clients to consider this useful product.

This takes us to another changing demographic in our country, the average age for new mothers is increasing.  The new average age of first time mothers is about 26 years old, says NPR.    This is up significantly in the past two years.  This older age also changes the considerations for families.  If these families have their first children at this age and plan to have more, the increased need for longer terms of life insurance can be seen.

I realize that numerous insurance agents will shake their head and point to the need for permanent life insurance - however there is no reason that clients to only have that option, especially giving the higher cost.   Another possible solution is the so called lifetime term product, which has its appeal.   However it still begs the question of - Where are the thirty five year term life insurance policies?   Are the executives at the insurance companies not noting the changing demographics?

Think of the Math this way:   A young woman comes to you wanting to secure life insurance age at 30.  She does not yet have kids but plans to soon.  Lets assume that she has her first child at age 35 and second one at 40.   Assuming she wishes to insure her children through their college years (lets assume age 25) this will mean that she will need life insurance until she is age 65.  How would a modern insurance agent solve this problem with today's tools?

My proposed solution is the thirty five year term policy.   What is yours?  I would love your feedback...

Thanks for reading.