25000 Life Insurance Policy: A Viable Option

$25K Life Insurance Policy

A life insurance plan is one of the most practical ways to protect your family from unforeseen incidents. 25000 Life Insurance Policy, a smaller insurance plan is something you can consider if you are concerned about your end-of-life expenses. 

Having an insurance plan provides you peace of mind knowing that your family will be financially protected in case of your sudden death. However, with a lot of insurance companies in the market offering various plans and rates, getting the best one that suits your needs and financial goals can be a complicated and daunting task. 

In this blog post, we will help you clear your confusion and complications about the $25,000 life insurance policy. We will do an in-depth exploration of this plan by knowing how it works, its types, and its different features. Let’s get started! 

What is a 25000 Life Insurance Policy? 

A 25000 life insurance policy is typically an insurance plan that provides a total death benefit of 25,000. The death benefit will be given to the insured’s beneficiaries after his passing away. 

Generally, this plan is a contract with the insurance company that the policyholder pays a scheduled premium (monthly or annually) for the cost of the plan’s coverage. In return, the insurer will pay a death benefit to the beneficiaries of the insured upon his death.

For instance, if you opt for a 25,000 insurance plan and die while your plan is still active, the payable death benefit will be 25,000 your beneficiaries may get. 

How does it work? 

While applying for the plan, the policyholder has options to choose the policy type, premium payment option (whether monthly, quarterly, or biannual), and others. After getting the plan, the insured has to pay the premium amount regularly to keep his policy active.

The death benefit of the plan is guaranteed unless and until premiums are paid, otherwise the policy will lapse. However, the death benefits are usually paid to the beneficiary in a lump sum payment and are tax-free according to the IRS. So that amount can be used how your beneficiary wants to. 

Meanwhile, it’s suggested to plan for the money of the policy to be used to reduce the financial burden of the surviving ones. Otherwise, they have to face severe financial obligations due to the loss of the insured person. 

How much does a 25000 Life Insurance Policy cost? 

The cost of 25000 life insurance policy depends on various factors including age, health condition, gender, lifestyle, and daily life activities. Let’s discuss them:

  • Age 

Getting a life insurance plan at a younger age will be more affordable than in older years. For instance, a 30-year-old man getting 25,000 whole life insurance has to pay less as compared to a 50-year-old for the same plan. The difference is due to less risk of dying and developing an illness while younger. 

  • Health 

Having a good health history means you have to pay lower premiums as compared to one with poor health. Moreover, if you have any history of high-risk health conditions, you might not get some specific insurance plans like you may not qualify for term or whole life plans. Instead, they have to consider a guaranteed acceptance policy. 

  • Gender

Typically, men have to pay higher premiums than women because of lower mortality rates for men. This is because there is more probability of death in males as their average life expectancy is 73.5 and for women is 79.3. So, life insurance plans’ cost will be calculated based on gender. 

  • Smoking or Tobacco

Smoking or tobacco use is an important factor in calculating your insurance plan’s cost. Smokers are at higher risk than non-smokers so they have to pay more coverage. Moreover, tobacco users also have to complete a medical questionnaire or may have to undergo a blood test or other additional medical tests to check the evidence of nicotine. 

So before signing a plan, it’s better to compare different plans from insurance providers to get the best one that fulfills your needs within your budget.

Types of $25,000 Life Insurance Plan

Whenever you are in the market finding a life insurance plan, you may come across various available options. Here are some of the common types of 25,000 life insurance policies. 

1- 25,000 Term Life Insurance Policy 

Do you want a basic life insurance plan without spending much? If yes, you can consider getting a 25,000-term life insurance policy as it is very cost-effective. This plan offers you fixed premiums for 10 to 40 years with a level death benefit. 

Term insurance plans are less expensive than permanent like universal life and whole life insurance. Furthermore, these plans also come with a conversion option, which you can convert your plan into permanent coverage without giving a new medical exam. For a basic $25,000 term life insurance plan, Assurity and Transamerica are the best options. 

2- 25,000 Permanent Life Insurance Policy 

It’s the type of life insurance that offers coverage for your entire life as long as you pay your premiums. This plan has further two types of life insurance plans offering different features. These are whole life and universal life insurance. If you want coverage for your loved ones when you die, permanent life insurance will be a more suitable option as compared to term. 

  • 25,000 Whole Life Insurance Policy 

This insurance coverage gives guaranteed premiums and death benefits for the policyholder. Along with it, it also builds a cash value that grows over time and accumulates money. So you can also call it a cash value 25000 life insurance policy. 

The insurer can get money (borrow or withdraw) from this cash value while he is still alive to pay expenses like tuition fees or retirement. However, he can also pay his future premiums with this amount. A $25,000 whole life insurance policy is more expensive as compared to term and universal life insurance plans. 

  • Universal Life Insurance

A type of permanent life insurance that combines the best parts of the term and whole insurance coverage is universal life insurance. Just like whole life, it also lasts for your whole life, has a cash value component that grows tax-deferred, and you can borrow against it when you need it. 

However, this plan does not allow you to adjust the death benefit and premium payment depending on your changing circumstances. Universal life insurance is a great option for those who need coverage to tailor their particular needs.

Who Should Buy a $25,000 Life Insurance Policy?

25,000 may sound like a lot of money, but what if the deceased person leaves significant debts or obligations behind? Moreover, do you have an idea that the average funeral alone can cost more than $9,000 in the USA? 

It means the beneficiary has to make the remaining 15,000 go a pretty long way, like paying for:

  • End-of-life expenses including medical or hospice care.
  • Small debts like outstanding consumer credit. 
  • Tuition fee or other educational expenses of the child. 
  • Income replacement.

All these expenses add up to a significant amount for everyone. Aside from these, there are still many reasons to buy a 25,000 life insurance policy especially when you have some dependents behind.

Frequently Asked Questions (FAQs)

1- What are the best insurance companies to buy 25,000 whole-life policies? 

To get a 25,000 whole life insurance plan you can consider:

  • Foresters
  • Assurity
  • Sagicor

2- Is it possible to get a 25,000 life insurance policy if you have any pre-existing medical condition? 

Yes, getting an insurance plan with a pre-existing medical condition is possible. However, note that the cost of your plan will be higher when you have a risky medical history. Therefore, consult an insurance agent or professional advisor to discuss your situation and explore options. 

3-  How to lower your premiums for a life insurance plan? 

If you want to reduce your premium amount you should consider these tips:

  • Quit smoking, if you are a smoker.
  • Compare rates before buying one. 
  • Consider paying annually, if you can afford it.