Life insurance is one of the best financial planning tools you can purchase to protect your family from unexpected death. A smaller life insurance plan, such as a $25,000 life insurance policy, is often something you would look into purchasing if you were concerned about your end-of-life expenses, such as funeral costs.
Having a policy in place can provide peace of mind knowing that your loved ones will be financially secure in the event of your passing. However, with multiple life insurance companies offering different plans, policy options, and rates, determining which will best meet your financial goals can become confusing and complicated.
Our comprehensive guide will help clear any confusion by providing an in-depth look into the $25,000 life insurance plans. By understanding how each type of plan works and knowing the different features and benefits they offer, you will be better equipped to make informed decisions about your life insurance needs.
Whether you’re new to life insurance or have a little experience with the subject, this guide will help you understand your coverage options and whether or not a $25,000 life insurance policy will be right for you.
What is a $25,000 Life Insurance Policy?
A $25,000 life insurance policy is a contract that offers a total death benefit of $25,000. The death benefit is payable to a policyholder’s beneficiaries upon their passing.
The life insurance contract works, with the insurance company requiring the policyholder to pay a scheduled premium payment for the cost of the coverage. In return, the life insurance company promises to pay the policyholder’s beneficiaries a death benefit payment upon the policyholder’s death.
So, for example, if you purchased a $25,000 life insurance policy and passed away while the contract was in active status, the payable death benefit amount that your beneficiary would receive would be $25,000.
The death benefit payout received from a life insurance contract is generally paid to the beneficiary in one lump sum payment and is considered tax-free by the IRS. Therefore, the death benefit payment your beneficiary receives from the life insurance company can be used how they choose.
Generally speaking, there is often a plan discussed ahead of time for the money to be used to help reduce any financial burdens that may affect the beneficiary due to the loss of the policyholder.
The cost of a $25,000 life insurance plan will depend on factors such as age, health status, and lifestyle habits. Therefore, it is essential to compare different policies from various providers to find one that meets your needs while staying within budget.
With proper planning, having a $25,000 life insurance policy can provide peace of mind knowing that your loved ones will be taken care of should something happen unexpectedly.
How to Know If $25,000 Is Enough Life Insurance Coverage
$25,000 is on the lower end of life insurance coverage amounts. As a result, it is generally not purchased by families needing higher coverage amounts to replace a spouse’s income, keep up with mortgage payments, or pay off the outstanding debt that would otherwise be left to the surviving spouse to worry about.
How much life insurance coverage you will need depends on several factors. Generally, most people will need a larger life insurance policy in their younger years, as financial obligations are often at their highest.
Many financial professionals will even recommend that you have at least a minimum of 10-12x your annual income, especially if you are still in you’re early working years and have dependents who rely on your income. The multiple of yearly income is a starting point for replacing lost income, and from there, you need to factor in other risks, such as debts that would need to be paid.
The critical thing to remember is that buying life insurance eliminates the financial risks that could be placed on your loved one caused by your passing. To do this, your death benefit has to be large enough to handle current and future financial risks that can arise.
As you enter your senior years, retire from your job, and have paid down your mortgage, your life insurance needs typically lessen, and the need for a large amount of coverage also reduces. At this point, looking at a $25,000 life insurance policy may start to make more sense.
Most $25,000 life insurance policies are generally purchased to cover final expenses. Typical final expenses include minor outstanding debts, such as credit card balances, small personal loans, or medical bills. You also have funeral expenses, such as burial or cremation costs. A $25,000 death benefit is often enough to cover these potential financial risks.
Types of $25,000 Life Insurance Plans
After evaluating your coverage needs and determining that a $25,000 policy is needed to ensure that your final expenses don’t become a financial burden to your loved ones, the next step will be to choose a type of life policy.
Three types of life insurance plans that can offer $25,000 of coverage include:
- Term Life Insurance
- Universal Life Insurance
- Final Expense Whole Life Insurance
While all three life insurance plans can offer a level death benefit of $25,000, they don’t all work the same. To help you understand the differences between each available plan, we will explain how they work and discuss the pros and cons.
Term Life Insurance
A term life insurance policy provides temporary coverage for a set amount of years, commonly called contract lengths ranging from 10 to 30 years. Ideally, you would choose a contract length based on estimating how long you anticipate needing life insurance protection.
During the entire length of the contract, your rates and death benefit remain the same. So, for example, if your death benefit amount was $25,000 and you passed away while the contract was active, your beneficiaries would receive a lump sum death benefit payment of $25,000.
One of the main benefits of a term life policy is how affordable the plans are compared to the other available life insurance policies. This is primarily because the coverage is not permanent and will expire once your contract is completed.
There is also no savings or investment components, so it doesn’t require a larger premium to help fund a cash account. Additionally, term life insurance policies are relatively easy to understand and purchase, making them a good option for those new to life insurance.
However, one of the largest drawbacks to a term life policy is its temporary coverage. Ideally, they are not the best option for seniors who want a policy that will last long enough to ensure their final expenses will be handled when they pass.
For example, you will no longer have coverage if you outlive the term policy contract. If you still need coverage after the term contract ends, you must undergo all new underwriting when purchasing a new policy.
Additionally, term life insurance policies do not build cash value, meaning you cannot borrow or withdraw money from the policy as you can with other types of permanent life insurance policies.
Another drawback is the lack of life insurance companies that can offer contracts with a $25,000 death benefit. Although a few highly-rated life insurance companies can offer a death benefit of $25,000, most companies start their minimum coverage amounts at $100,000.
Overall, we would not recommend a $25,000 term life insurance policy if you are in your senior years and the primary goal of purchasing a policy is to cover your final expenses. While a term policy can be a good option for those looking for an affordable price for their life insurance coverage, the risk of outliving your policy is highly likely.
$25,000 Term Life Insurance Rate Chart
| Age | Gender | 10-Year Term | 20-Year Term | 30-Year Term |
|---|---|---|---|---|
| Age 30 | Male | $6.74 / monthly | $7.03 / monthly | $7.70 / monthly |
| Age 30 | Female | $6.46 / monthly | $6.74 / monthly | $7.20 / monthly |
| Age 40 | Male | $7.29 / monthly | $8.22 / monthly | $9.57 / monthly |
| Age 40 | Female | $7.00 / monthly | $7.68 / monthly | $8.68 / monthly |
| Age 50 | Male | $9.59 / monthly | $12.33 / monthly | $16.25 / monthly |
| Age 50 | Female | $8.70 / monthly | $10.74 / monthly | $13.46 / monthly |
| Age 60 | Male | $15.62 / monthly | $24.62 / monthly | Not Available |
| Age 60 | Female | $12.75 / monthly | $18.75 / monthly | Not Available |
| Age 70 | Male | $28.58 / monthly | Not Available | Not Available |
| Age 70 | Female | $22.58 / monthly | Not Available | Not Available |
*Sample rates shown in the above table are based on males and females in excellent health with no nicotine use. The monthly $25k term life insurance rates are current as of 3/20/2023 and were pulled directly from our online quote tool of over two dozen life insurance providers.
Universal Life Insurance
Universal life insurance plans can be confusing because of the different available options. For example, there is traditional universal life, indexed universal life, and variable universal life. There is also guaranteed universal life insurance or GUL, the plan we find best for anyone looking for an affordable price on a permanent life insurance policy.
One of the main benefits of a $25,000 guaranteed universal life insurance policy is that they are about as straightforward as term insurance. The most significant difference is that your policy provides permanent insurance protection rather than temporary protection.
Guaranteed universal life insurance is designed to offer fixed premiums and a guaranteed level death benefit that lasts the entire contract duration, generally up to age 120. If you pay your monthly premiums, your beneficiaries are guaranteed to receive the full $25,000 death benefit when you pass away.
However, one of the primary cons of a guaranteed universal life insurance policy is that they are a little more expensive than term life insurance policies. Another downside is that while there is a cash value component, these plans rarely accumulate any cash value. This is because they are designed to be an affordable alternative to the other types of universal life insurance plans that offer cash value growth but at a higher premium.
Overall, a $25,000 guaranteed universal life insurance policy can be an excellent option for those looking for an affordable price on permanent life insurance coverage and who are not concerned about cash value growth.
$25,000 Universal Life Insurance Rate Chart
| Age | Gender | Guaranteed Universal Life "Fixed Premium to Age 121" |
|---|---|---|
| Age 30 | Male | $17.72 / monthly |
| Age 30 | Female | $14.30 / monthly |
| Age 40 | Male | $27.74 / monthly |
| Age 40 | Female | $23.12 / monthly |
| Age 50 | Male | $43.70 / monthly |
| Age 50 | Female | $36.12 / monthly |
| Age 60 | Male | $64.98 / monthly |
| Age 60 | Female | $60.11 / monthly |
| Age 70 | Male | $101.95 / monthly |
| Age 70 | Female | $89.34 / monthly |
*Sample rates shown in the above table are based on males and females in excellent health with no nicotine use. The monthly $25k guaranteed universal life insurance rates are current as of 3/20/2023 and were pulled directly from our online quote tool of over two dozen life insurance providers.
Final Expense Whole Life Insurance
Final expense whole-life policies are another type of permanent policy that offers smaller death benefits, such as $25,000, to cover the costs associated with end-of-life expenses. Because of the smaller death benefits, this type of life insurance is often marketed to seniors as an affordable option to cover minor end-of-life expenses such as funeral costs.
As these plans offer permanent coverage that will last your entire life, you can rest assured that your beneficiary will receive the full death benefit payout upon passing. Some of the other main benefits of final expense whole life insurance are the rates, and death benefits are guaranteed to remain the same throughout the entire time you have the coverage.
In addition, a whole life insurance policy includes a cash value component. Every time a premium payment is made, a pre-determined portion is placed into the cash account, which will grow and be borrowed from when needed.
Another benefit to final expense whole life plans is their simplified no-medical exam underwriting process. Instead of a medical exam, the application will require answers to several health questions that will be partly used to determine eligibility for a policy.
However, one of the cons of a final expense whole life insurance policy is that it is generally more expensive than term life insurance policies. This is because it provides lifetime coverage and includes a cash value component, which adds to the cost of the policy.
Overall, a $25,000 final expense whole life insurance policy can be a good option for those looking for permanent life insurance coverage to cover the costs associated with their final expenses.
$25,000 Final Expense Life Insurance Rate Chart
| Age | Gender | Final Expense Whole Life Insurance |
|---|---|---|
| Age 30 | Male | $34.38 / monthly |
| Age 30 | Female | $31.73 / monthly |
| Age 40 | Male | $43.61 / monthly |
| Age 40 | Female | $40.50 / monthly |
| Age 50 | Male | $60.01 / monthly |
| Age 50 | Female | $55.17 / monthly |
| Age 60 | Male | $88.59 / monthly |
| Age 60 | Female | $76.35 / monthly |
| Age 70 | Male | $141.97 / monthly |
| Age 70 | Female | $122.80 / monthly |
*Sample rates shown in the above table are based on males and females in excellent health with no nicotine use. The monthly $25k final expense whole life insurance rates are current as of 3/20/2023 and were pulled directly from our online quote tool of over two dozen life insurance providers.
The Cost of a $25,000 Life Insurance Policy
The cost of a $25,000 life insurance policy, or any coverage amount, for that matter, is based on multiple factors.
Age
Buying coverage in your younger years will always be more affordable than in your senior years. For example, a 30-year-old individual purchasing a $25,000 whole life insurance policy will pay much less for the same policy as someone 50 years old.
The difference in rates can be attributed to less risk of passing away and the chances of developing an illness in your younger years versus your senior years.
Health
Health is a critical factor in life insurance rates and approval for coverage. Generally, someone with good health history will pay lower premiums than someone with poor health.
In addition, someone with a history of high-risk health conditions may be unable to purchase specific life insurance policies. For example, they may not qualify for a term life or whole life policy.
Instead, they may consider a $25,000 guaranteed acceptance plan with limitations on their coverage, such as a 2-year waiting period before benefits can be paid out.
When purchasing a $25,000 life insurance, overall health is important. Those with good health should take advantage of the lower premiums and expanded coverage options.
In contrast, those with poor health should research their options carefully and ensure they understand any limitations or restrictions on their policy before signing up for a plan.
Gender
Generally, men tend to pay higher premiums than women due to lower mortality rates for males. This is because life insurers use statistics to determine the probability of death and therefore calculate the cost of life insurance policies based on this data.
Based on the latest life expectancy data by the National Center for Health Statistics, the average life expectancy for a male is 73.5, and for women, 79.3.
Tobacco
When it comes to life insurance premiums, tobacco use is a significant factor. Smokers are considered higher risk than non-smokers and typically pay more for coverage. People who have used tobacco within the last five years will be asked to provide this information when applying for a $25,000 life insurance policy.
Tobacco users may be asked to complete a medical questionnaire when signing up for a policy and may need to undergo blood testing and other medical exams. If the tests show evidence of nicotine or other substances in their system, they will likely be required to pay higher premiums than non-smokers.
It is important to note that not all insurers offer the same rates or discounts for those who have quit using tobacco in the past five years. Therefore, checking with your provider directly or using an online comparison tool to determine which providers offer the best rate for your situation is best.
Applying for a $25,000 Life Insurance Policy
Once you have determined that a $25,000 life insurance policy is the right amount of protection to cover funeral costs and any other final expenses, the next step is to apply for the policy to secure coverage.
At this point, you may have likely been working with an agent who has helped review coverage needs, provided potential life insurance quotes and rates for the cost of a $25,000 policy, and will be assisting with the application process.
The process of applying for life insurance coverage will vary depending on the provider and type of coverage. However, the following is a general overview of the common steps consistent with most applications.
Application
When completing an application, be prepared to provide personal and financial information, such as age, occupation, income level, and beneficiary details. You must also provide health history details by answering several health questions.
Once the application has been completed and submitted to the insurance company, the insurer will assign it to an underwriter for review. The information you provide on the application will be used to evaluate your level of insurability.
Medical Exam
Several life insurance companies can offer a non-medical application process with term life and universal life insurance plans. However, not everyone who applies for a policy will qualify for non-medical underwriting, and you may be asked to complete a medical examination provided by the insurance provider.
Final expense whole life insurance and guaranteed acceptance plans are the only type of life insurance plans that would not require a medical examination.
Underwriting
During underwriting, the insurer will review the life insurance application and assess your medical history, lab results from the medical exam, and lifestyle habits. They will also use third-party data sources to examine to obtain information about your medical history, prescribed medications, driving record, criminal history, and financial history.
The data that most insurance companies receive about you will often come from a search of your MIB (Medical Information Bureau) and LexisNexis file. Based on the information from the application, medical exam, and information received from the other sources, they will determine whether you are eligible for a $25,000 life insurance policy and what kind of final life insurance rate you will be given.
Approval
You will be asked to pay the required premium to activate the life insurance coverage upon approval. Most insurers also offer flexible payment options, making budgeting for life insurance coverage more accessible. It is important to remember that life insurance policies are long-term commitments, so choosing one that fits your budget and meets your needs over time is essential.
If coverage is approved, it is important that you carefully review all of the details associated with your chosen policy before signing any paperwork or making payment. Make sure you understand what kind of benefits are included as well as any exclusions or limitations that might apply before moving forward with purchasing the plan.
You are not required to accept the policy even if approved or not approved as initially quoted due to the underwriting results. Also, most insurance providers provide a 30-day free look that allows you to cancel your coverage to receive a full refund of your premium should you decide the coverage is not what you want as long as the request is made within the first thirty days of the new policy being activated.
Finding the Best $25,000 Life Insurance Companies
Suppose you were to do a simple online search of the best $25,000 life insurance companies. In that case, it is highly likely to return multiple results listing every popular life insurance company offering a $25,000 life insurance policy as the “best companies.”
While we have reviewed many of these articles and can agree that most of the companies on these lists are good, we can’t agree that they will necessarily be the best companies for everyone applying for a $25,000 policy.
Choosing a life insurance company is a complex process. As an experienced life insurance agency that has worked to help thousands of people obtain life insurance coverage, finding the right life insurance policy requires learning about an individual, their health, and coverage needs to identify the right life insurance plan.
If you’re in the early process of looking into getting a $25,000 life insurance policy, let us help by providing some helpful tips on what it takes to find the best company.
Research Coverage Options: The first step is precisely what you are doing this moment by reading this article and taking the time to research your coverage options. Learn about the different life insurance plans, how they work, and the advantages and disadvantages of each plan.
Compare Rates: Once familiar with your coverage options understand how much the coverage will cost. The easiest way to do this is using an online quote comparison tool. Most life insurance websites, such as No Medical Exam Quotes, offer a quote tool that can display rates from multiple insurance companies all at once. However, remember that rates are only a quote until you have been approved and qualified for coverage by underwriting.
Compare Policy Features: After receiving potential sample rates from different companies, learn about the coverage and policy features. For example, some companies offer plans that include living benefit options that allow early access to the death benefit if you become sick. You will also want to find out about any other policy riders that may be available and the conversion option that allows converting your $25,000 coverage into a permanent life insurance plan.
Read Customer Reviews: As you start compiling a list of potential companies and rates for coverage, it’s a good idea to check out customer reviews about the companies on your list. Weigh out the number of positive remarks versus negatives. Ideally, you want to see a company that has received positive reviews for its outstanding customer service and quick responses to handling any negative statements.
Check Financial Strength: Besides customer reviews, you will also want to check the financial strength rating of the companies you are considering buying coverage from. Rating agencies, such as AM Best, provide insight into how financially stable a company is in its ability to pay out claims. A company with strong ratings will have received a letter grade of (A++, A+, A, and A-).
The best way to find the right $25,000 life insurance company is to research and compare your options carefully. Consider your needs, budget, and personal preferences when selecting a policy, and be sure to work with a licensed insurance agent when it is time to commit to a policy.
An independent agent contracted with multiple life insurance companies will have the upper advantage over an agent captive to one company, such as a State Farm agent.
$25,000 Life Insurance Companies
The following life insurance companies listed in the below chart are all providers that offer $25,000 life insurance plans. These companies have all received an AM Best rating of an “A” or better, indicating they have been viewed as having strong financial stability.
No Medical Exam Quotes is contracted and has worked with each company in the chart. We have also written in-depth reviews explaining the coverage, which can be viewed by clicking the “coverage details” link below.
| Company | AM Best Rating | Policy Type | |
|---|---|---|---|
| Assurity | A | Term Insurance | Coverage Details |
| Cincinnati Life | A+ | Term Insurance | Coverage Details |
| Transamerica Life | A | Term Insurance | Coverage Details |
| American National | A | Universal Life | |
| Pacific Life | A+ | Universal Life | |
| Foresters | A | Whole Life | Coverage Details |
| Mutual of Omaha | A+ | Whole Life | Coverage Details |
| Transamerica | A | Whole Life | Coverage Details |
$25,000 Life Insurance FAQs
Is a $25,000 life insurance policy enough coverage?
Whether or not a $25,000 life insurance policy is enough coverage depends on your individual needs and financial goals. Generally speaking, life insurance is meant to provide financial security to your family and loved ones in the event of your death.
The amount of coverage you need can vary depending on how much debt you have, how many dependents you have, and your current income. Ultimately, it is up to you to decide how much coverage you need to ensure that your loved ones are cared for in the event of your death.
How do I determine how much life insurance coverage I need?
The best way to determine how much life insurance coverage you need is to consider your current and future financial needs. For example, a good starting point is with current income and its effect on your loved ones if it were suddenly gone. You will also want to factor in your household expenses, debt, dependents, and financial goals like retirement or education savings.
In addition to the amount of coverage, you will also want to consider the length of time your family may need the life insurance coverage. For example, if you have young children or many years until retirement, you may need coverage for a longer period, such as a 30-year term contract.
Once you know how much life insurance coverage you need and the length of time you think you may need coverage, you can compare different policies to find one that fits your needs and budget.
Can I get a $25,000 life insurance policy if I have a pre-existing medical condition?
Getting a life insurance policy with a pre-existing medical condition is possible. However, the cost of the policy may be higher than for someone without a pre-existing condition. Therefore, it is best to speak to an insurance agent to discuss your situation and see options.
Is term or permanent life insurance better for a $25,000 policy?
It depends on your individual needs and circumstances. Term life insurance provides temporary life insurance protection and is generally less expensive than permanent life insurance coverage.
This is because it provides coverage for a limited period of time, such as 10, 20, or 30 years. The death benefit is only paid to the beneficiary if the insured passes away while the term contract is active.
Term insurance is a good option if you’re concerned about cost and your life insurance needs are temporary.
Permanent life insurance, on the other hand, provides coverage for life and can include additional features such as cash value accumulations and the ability to borrow against the policy. However, it is generally much more expensive than term life insurance so if you’re concerned about cost, permanent life insurance may not be the best option.
Ultimately, the best policy for you will depend on your individual needs, budget, and circumstances.
How can I find the best rates for a $25,000 life insurance policy?
The best way to find the best rates for a $25,000 life insurance policy is to shop around and compare rates. You can use online comparison tools, contact multiple insurance providers, or work with an independent insurance agent who can shop on your behalf.
Can I change my $25,000 life insurance policy to a higher amount later on?
Most life insurance providers will allow you to purchase multiple policies, whether with the same provider or another provider. However, to increase the death benefit on an existing policy, most providers will not allow it.
How long does it take to get approved for a $25,000 life insurance policy?
The timeframe to receive approval for a $25,000 life insurance policy will vary on factors such as the type of coverage and often the overall health of an individual applying for the life insurance coverage.
For example, some plans can provide instant approval, while others may take days to weeks before approval can be made. Much of the timeframe will depend on whether a medical exam is required for the underwriting process.
Most life insurance plans, such as term insurance with death benefit amounts under $100,000, will generally not require a medical exam for applicants age 65 and younger. However, if you are over 65, you may have to complete an exam which can delay the overall approval time.
On the other hand, final expense plans require no medical exams at all, regardless of age.
