15-Year Term Life Insurance

A term life insurance plan is considered as one of the simplest and affordable insurance options. It provides your family with a financial safety net that will take care of their financial goals and needs in your absence.

Once you have decided on the term insurance plan that you want to buy, you will have to choose its duration. It can be 10 years, 30 years, 60 years or more based on your choice. Your financial obligations and their anticipated duration will determine the ideal policy term.

Take note of your financial responsibilities such as day-to-day living expenses, loans, and all other expenses your family would need to cover if you are not around them. If you do not have major financial responsibilities to deal with, a 15-year term policy can be the best option for you. This kind of term life insurance may be appropriate for you if by the end of 15 years - your children will be financially independent, your loan will be paid off fully, and you will also have accrued enough savings.

In this article, we’ll discuss the various facets of 15-year term life insurance.

What is Term Insurance?

Who doesn’t want to secure the future of their loved ones in case an unfortunate situation happens? If you are the primary earning member, they might rely on your income for their living expenses. But what will happen if you pass away? How do they manage their financial objectives, expenses, and way of life?

This is where term insurance policy plays a vital role. If you pass away while the policy is in effect, it provides your family with a fixed sum of money which they can use to meet their financial obligations.

It is the easiest and most cost-effective way to provide a safety net for your family. You can select a plan and alter its duration, cover amount, payout options, and other features to accommodate your family's financial obligations.

What is 15-Year Term Life Insurance?

As the name suggests, this type of term insurance plan covers you for 15 years. 15-year term insurance plans help your family to meet the financial obligations in case of your untimely demise. If you pass away during this period, your nominee will receive the cover amount.

How Does a 15-Year Term Life Insurance Policy Work?

Under the 15-year term insurance policy, you get a cover for 15 years. You can select a sum assured based on your debts, liabilities, short and long-term expenses of your family, financial objectives, etc.

For instance, if you have taken any loans that you need to pay off in the next 15 years, you can choose the term insurance policy duration of 15 years, and a cover amount that will suffice the loan balance - so your family won’t have to shoulder the debt burden.

Additionally, you can customise the policy by adding riders, benefits, and features, and selecting how your family will be compensated in the event of your passing away in the middle of the policy term.

What Happens After 15 Years?

Term insurance plans are pure risk protection plans. If you buy term plan for a period of 15 years and survive this term, neither you nor your nominee receive any benefits. So, no death benefit will be paid to your beneficiaries and no maturity benefit will be paid to you.

Look at an example to understand this better. Megha purchased a term insurance plan with a sum assured of 50 Lakhs and a policy duration of 15 years. She assigned her spouse Suraj as her nominee and went with the lump sum payout option.

Scenario 1: Megha dies in the middle of the policy tenure In this instance, the insurer will pay Suraj the entire Rs. 50 Lakhs death benefit all at once.

Scenario 2: Megha lives longer than the policy's term In this case, Megha won't get any maturity benefits from the insurer. After 15 years, her term insurance policy will terminate.

Note: If you purchase the term plan with the Return of Premium option, you will receive a full refund of the premiums you paid (minus taxes). This is a viable option if you want maturity returns from a term insurance plan.

Benefits of 15-Year Term Life Insurance

1. Is A Short Term Commitment Since the 15-year term insurance plan has a shorter duration, you will have to make premium payments for a shorter duration. As a result, you are unlikely to feel burdened by having to manage other financial obligations in addition to making the premium payments.

2. Is A Helping Hand For Your Family An example will help you understand this better. For instance, Saurav is 35 years old. He has a dependent wife and daughter. He purchases a 15-year term life insurance policy keeping in mind his needs and choices. Now, in case of his sudden demise, his wife will get a death benefit that can help her cover everyday expenses, pay off any loans, and fulfill future goals like their daughter’s education.

3. Is A Way To Replace An Earning Family Member If you are the only earning member of your family, this policy can have huge benefits for you. For instance, if anything happens to you during this phase of 15 years, the death benefit amount will act as a source of income for your family members. It can help them to meet their financial needs without any stress or burden.

Is 15-year Term Life Insurance A Good Idea?

You need to be aware of your needs and preferences before choosing any plan. Doing this will help you make informed decisions and fulfill your goals to the fullest. A 15-year term life insurance policy can be an ideal option if -

You have short-term insurance needs with a specific end date, such as a child’s graduation or your retirement.

For example, Rohini, a 42-year-old mother, lives with her 9 year old son. Her financial goal is to save money for his education, which will go on for the next 15 years. And, she will need enough funds for the same. So, she purchases 15 year term life insurance with a cover amount of Rs 25 lakhs. Even if Rohini passes away during this period, the cover amount will suffice her son’s education expenses.

You have taken any loans that need to be repaid within the next 15 years and the repayment burden will fall on your dependent family members if you pass away. They can use the claim amount to repay the same.

You think you can accumulate sufficient wealth within the next 15 years that will last a lifetime. The claim amount from a 15 year term life insurance plan can be used by your dependent family members for their financial goals in case you pass away during the policy term.

However, you should think about purchasing a term insurance policy with a longer duration, if you believe that you will have significant financial obligations that go beyond 15 years.

To Conclude

We hope that this article has helped you understand what a 15-year term life insurance policy is. Do not forget to evaluate your requirements to determine whether it is appropriate for you and your family. We are sure this will help you make a well-informed decision.