Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001 and has an undergraduate degree from Manhattan College in ...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Joel...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Dec 1, 2021

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The Truth in a Nutshell

  • Term life insurance is one of the most popular policies
  • Many insurers will give you better rates for shorter terms
  • Apply while you’re young and healthy to get the best rates

Many life insurance companies offer five-year terms. Because the coverage lasts for a short period, it can also be more affordable than extended life insurance policies. You should make sure you apply as soon as possible to get the best rates that you can.

If you need help understanding this or other term life insurance topics, you’ve come to the right place. Keep reading to get the best term life insurance available.

While you’re researching life insurance companies that offer five-year terms, enter your ZIP code to see what you could pay with a term life insurer today.

What life insurance companies offer 5-year terms?

Are you looking for the best life insurance companies that pay out on five-year terms? Many insurance companies will offer term life insurance due to its low risk-to-return ratio compared to extended policies.

Because term life insurance only lasts for a short time in your life, the insurance company isn’t taking on that much risk by insuring you. It’s less likely that the insurer will have to pay out during this period, which means a much greater chance to make money compared to longer policies.

Below you can see sample rates for a term life insurance policy from State Farm, organized by age, coverage, health, and smoker status.

State Farm Term Life Insurance Rates by Age, Coverage Limit, and Health

Policyholder's AgeNon-Smoker Monthly Life Insurance Rates with $100K Coverage and 10-Year TermNon-Smoker Monthly Life Insurance Rates with $100K Coverage and 20-Year TermNon-Smoker Monthly Life Insurance Rates with $250K Coverage and 10-Year TermNon-Smoker Monthly Life Insurance Rates with $250K Coverage and 20-Year TermSmoker Monthly Life Insurance Rates with $100K Coverage and 10-Year TermSmoker Monthly Life Insurance Rates with $100K Coverage and 20-Year TermSmoker Monthly Life Insurance Rates with $250K Coverage and 10-Year TermSmoker Monthly Life Insurance Rates with $250K Coverage and 20-Year Term
25$13$14$19$21$21$21$32$40
30$14$14$20$23$22$24$34$45
35$15$16$21$24$24$27$37$51
40$16$20$25$31$30$38$51$72
45$21$25$30$41$38$53$72$107
50$25$33$41$62$53$78$106$166
55$32$45$59$92$73$116$158$259
60$46$73$92$157$115$183$261$421
65$71$121$146$272$184$291$434$686
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While this example features a longer term, compare the rates to whole life insurance rates from State Farm based on the same factors.

State Farm Whole Life Insurance Rates by Age, Death Benefit, and Health

Policyholder's AgeNon-Smoker Monthly Whole Life Insurance Rates with $100K CoverageNon-Smoker Monthly Whole Life Insurance Rates with $250K CoverageNon-Smoker Monthly Whole Life Insurance Rates with $500K CoverageSmoker Monthly Whole Life Insurance Rates with $100K CoverageSmoker Monthly Whole Life Insurance Rates with $250K CoverageSmoker Monthly Whole Life Insurance Rates with $500K Coverage
25$89$214$422$111$269$532
30$103$247$488$129$313$619
35$121$292$579$152$370$733
40$143$348$691$179$438$870
45$173$425$843$215$529$1,051
50$213$524$1,042$265$652$1,299
55$269$663$1,321$335$829$1,651
60$355$879$1,753$428$1,061$2,116
65$475$1,178$2,350$543$1,348$2,689
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As you can see, whole life insurance can quickly become hundreds of dollars more expensive than traditional term life insurance. While you can get a $14 a month term life insurance policy at age 30, it may cost you $100 to get whole life insurance.

Life insurance companies that don’t offer five-year terms are likely to focus on longer life insurance terms, or policies with an investment value.

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How can you find the best term life insurance companies?

To find the best life insurance companies, you’ll most likely have to do some research. However, you can find reputable information services online to help you narrow down which insurer is best for you.

When you begin looking for a new term life insurance policy, you should consider the insurer’s:

  • Financial assets
  • Customer service abilities
  • Credit history

It’s wise to make sure that your insurer has the financial ability to carry out your life insurance policy if the time comes. While a five-year term might be the least risky life insurance product, you’ll still want to make sure the company is financially sound.

Where can I find customer reviews and industry ratings?

Where are the best term life insurance companies’ consumer reports? Various rating services are publicly available and can be accessed with a short Google search. Some of these insurance information sources include:

  • Better Business Bureau – The BBB gives customers a place to vent their frustrations with a business and lodge official complaints.
  • A.M. Best – This credit rating agency makes sure that a lender or insurance company has the assets to invest in your life, providing ratings that correspond to financial stability.
  • Moody’s – The is another credit rating service that rates an insurer based on its ability to pay out on policies.

There are other places you can get insurance information, like the Insurance Information Institute or the National Association of Insurance Commissioners. However, if you want to check a specific insurer, the places above will be a great start.

What is term life insurance?

Term life insurance lasts for a specific period in your life. It’s an umbrella term that covers a few different types of policies.

Some of the subtypes of term life insurance include:

  • Level term – The most straightforward and affordable policy provides a level term and death benefit for the life of the coverage.
  • Renewable – Up to a certain age, you can renew this policy and get the same rates as when you first signed up.
  • Return of premium – With this policy, you can get a portion of your premiums back if you outlive the length of coverage.

There are likely other types of term life insurance. You may wish to discuss your options with an insurance agent before making a decision.

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What should you know before getting a term life insurance policy?

As with all life insurance policies, you should be aware of the features and limitations that term life offers. For instance, a five-year term life insurance policy will only last for a short while, so it’s best to use it in specific periods when you might need coverage.

A new baby or the loss of a loved one might spark the thought of getting a term life insurance policy. Luckily, shorter term life insurance policies are more affordable due to the lower risk. That doesn’t mean you’re guaranteed a policy, though, as the insurer will still underwrite you.

What will determine your life insurance costs?

Your life insurance company is a business at the end of the day, and it needs to make enough money to pay its bills and employees. To do this, the insurer will look at the risk you pose of dying during the policy, because that means they’ll have to pay out.

This process is known as insurance underwriting, and it will take a look at a variety of factors in your life, from your health to your weekend activities.

Enter your ZIP code into our free tool to get term life insurance quotes today.

What is life insurance underwriting?

Life insurance underwriting is the practice of evaluating the risk you pose of dying during the policy’s life. The longer the policy, the more threat you pose of dying, and the higher the rates.

When you apply for a life insurance policy, you can expect the life insurance company to look at factors in your life, such as:

  • Health history
  • Family history
  • Occupation
  • Hobbies
  • Tobacco use

The insurer may find this information through a voluntary questionnaire, a medical exam, or their research through various medical databases.

There are options to get guaranteed life insurance that doesn’t look at your medical history or require an exam, but you can expect to pay high prices to get that risk covered.

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How can I get lower life insurance rates on 5-year terms?

If you want to get lower life insurance rates, you’ll need to lower your risk of dying while the policy is in force. If your life insurer can tell that you’ve been attempting to get healthier and live longer, then it’ll be that much more willing to give you savings.

Some of the things you can do to lower your life insurance risk include:

  • Avoiding any traffic tickets
  • Eating healthier and exercising
  • Improving your credit history
  • Minimizing or stopping any risky hobbies
  • Quitting or cutting back on smoking

Any of these factors will go a long way towards improving your health and the insurer’s opinion. Another sure-fire way to save on your life insurance rates is to start the policy as early as you can.

What is the primary alternative to term life insurance?

According to the Insurance Information Institute, the two primary types of life insurance policies currently sold are term life, which has previously been discussed, and permanent life insurance. Permanent life insurance is also sometimes referred to as whole life.

Companies With 5 Year Term Life Insurance: The Bottom Line

If you are looking for a life insurance company that offers five-year terms, you’ll be able to find many options. The shorter the life insurance policy, the less risk the insurer takes on, which translates into savings. Also, starting your policy as young as possible can help you save as well.

When you’re finished researching quotes from companies that offer five-year terms, enter your ZIP code into our free tool to get term life insurance quotes today.