$25,000 Whole Life Insurance Policy: Pros and Cons

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Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states.
After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insu…

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Rachael Brennan

Licensed Insurance Agent

UPDATED: Feb 23, 2022

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Here's the Scoop

  • A $25,000 whole life insurance policy offers a reasonable death benefit alongside interest-generating cash value
  • Your whole life insurance rates will depend on your age, gender, coverage benefits, and how you pay for your policy
  • The amount of cash value a $25,000 whole life insurance policy can accrue will depend on how much you pay into the policy and how soon

A $25,000 whole life insurance policy could be a great option for anyone looking for modest coverage with an affordable monthly premium. Many people don’t need to pay for a policy with hundreds of thousands of dollars for a death benefit.

Choosing the right life insurance policy can be daunting. This article will help serve as a guide to buying a $25,000 whole life insurance policy by breaking down potential costs, companies, and more.

Ready to learn more about getting a $25,000 life insurance policy? Keep scrolling to learn more or take advantage of our free quote tool above to get instant quotes from the top life insurance companies in your area.

Table of Contents

What is a $25,000 whole life insurance policy?

For starters, it helps to know the difference between a whole life insurance policy and a term life insurance policy. These two common insurance policy options serve different functions. Term life insurance is usually more affordable and strictly offers a large death benefit to be paid once the policyholder dies.

By contrast, a whole life insurance policy usually includes a smaller death benefit but also has a cash value component. The cash value can be used to pay premiums at a later date, be withdrawn, or be used for emergencies. Whole life insurance policies tend to be a touch more expensive due to the cash value.

A $25,000 whole life insurance simply carries a $25,000 death benefit to supplement the cash value portion of the policy. Many term life insurance policies offer much larger death benefits, which may not be necessary for every prospective policyholder.

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How much for a $25,000 whole life insurance policy?

The amount you’ll pay for a $25,000 whole life insurance policy can vary based on a few factors. For starters, prices will vary from company to company. Otherwise, your rates can change based on your age, gender, health, and much more.

Beyond the factors mentioned above, the type of whole life insurance policy you secure could also play a notable role in your monthly premiums. For example, if you buy a whole life insurance policy with no medical exam, it might be more expensive than one that requires a medical exam.

In other cases, burial or final expense insurance could be an option given the coverage amount of $25,000. Final expense insurance is a type of whole life insurance that is designed to cover the costs of a funeral or other related expenses.

While we don’t have exact $25,000 life insurance policy rates for traditional whole life insurance policies, you can see some major differences in monthly premiums between term and whole life insurance in the table below.

Comparison of State Farm Term vs. Whole Life Insurance Rates for $100,000

Age Male, Term Life Insurance Male, Whole Life Insurance Female, Term Life Insurance Female, Term Life Insurance
25 $14.27 $93.70 $12.70 $84.91
30 $14.70 $107.71 $13.22 $97.35
35 $15.23 $128.24 $15.40 $112.93
40 $16.36 $153.90 $18.62 $132.15
45 $20.79 $190.79 $22.97 $156.17
50 $26.54 $234.90 $29.32 $191.66
55 $34.45 $294.84 $38.11 $243.17
60 $51.50 $399.24 $60.20 $311.63
65 $83.09 $528.00 $97.44 $421.69
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For young adults, term life insurance can be much more affordable on a monthly basis. Of course, these rates will increase whenever the term ends for that policyholder. Despite having similar coverage, whole life insurance is quite a bit more expensive each month.

Realistically, the best way to get accurate quotes that show you how much you will pay for a $25,000 whole life insurance policy is to get personalized quotes from a handful of life insurance companies.

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It’s worth mentioning that some whole life insurance providers might have age or coverage restrictions on life insurance policies. Older adults may be better off investing in burial insurance instead of a larger whole life insurance or term life insurance policy.

Funerals can get expensive quickly. The Federal Trade Commission mentions that some caskets alone can cost nearly $10,000. For this reason, a $25,000 burial insurance policy isn’t unreasonable for older adults.

Sample $25,000 Final Expense Insurance Rates for Men

Age Aetna Foresters Transamerica AIG Mutual of Omaha
60 $124.17 $108.24 $104.17 $172.22 $102.08
65 $151.25 $134.64 $135.96 $230.27 $134.59
70 $199.17 $177.54 $181.28 $268.55 $179.45
75 $265.83 $252.00 $244.72 $378.64 $244.02
80 $359.58 $362.12 $345.21 $672.87 $326.83
85 $492.92 NA $495.72 $865.38 $453.08
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You can see above that final expense insurance rates can be fairly reasonable on a monthly basis in most cases. Again, final expense life insurance policies are typically just a basic form of traditional whole life insurance policies. Both policies offer permanent coverage and usually build cash value.

What is $25,000 whole life insurance policy cash value?

When you pay for your whole life insurance policy, a portion of your payment should go to the cash value component while the rest covers whatever the company charges for the death benefit. The cash value is basically held in a separate account that grows and builds interest over time.

Building interest on a $25,000 whole life insurance policy can be one of the key benefits. The amount of interest you’ll generate depends on your payment structure and the insurance company’s minimum guaranteed interest rate. Market fluctuations may also impact your cash value interest accruals.

Some of the best whole life insurance companies, such as State Farm, will offer different payment options. Although the whole life insurance policy always offers permanent life insurance coverage, you could opt to pay a single premium over the course of a predetermined term or every month for life.

Like most investment accounts, the more you invest, the greater the absolute interest return can be. Depending on the insurance company, you can usually use your cash value to pay future premiums or you could take a loan out of your cash value for qualifying emergencies.

If your situation changes and you suddenly need to cash out your $25,000 whole life insurance policy, you may have to pay some fees and taxes on any interest that you’ve built up over the duration of your policy. You’ll want to identify these details with your insurance company before you finalize the policy.

Buying a $25,000 Whole Life Insurance Policy

Popular life insurance companies like State Farm, Northwestern Mutual, and MassMutual offer whole life insurance. A $25,000 policy could be an affordable alternative to a traditional term life insurance policy for anyone that doesn’t need a major death benefit.

We hope you enjoyed learning more about a $25,000 whole life insurance policy. Before you go, use our free quote tool to get instant rates from the top life insurance companies in your area.