By age 40, you likely have financial responsibilities, such as a mortgage, spouse or children. Which means you have family and assets worth protecting.
The cost of life insurance gets more expensive as you get older, and by age 55 or 60, your policy options become more limited. That’s why your forties are a good time to consider getting life insurance, that way you have peace of mind that your family is taken care of if you die unexpectedly.
What’s the best life insurance policy for people over 40?
The best life insurance for people in their 40s is typically term life insurance, this type of policy covers you for a set period of time, like the length of your mortgage. But, if you’re more interested in a policy to carry you throughout the remainder of your life a permanent policy offers lifelong coverage while building cash value.
We recommend: Term life insurance with a conversion rider
Term life insurance is the simplest type of policy and a common choice for people in their 40s. Your premiums stay the same for the length of your policy, which makes it easier to budget into your monthly costs. Set your term length to match the length of your mortgage or until your children are self-reliant.
Plus, if you opt for a term policy with a conversion rider, you’ll be able to upgrade your policy to a permanent policy within a designated time frame, like before your policy ends or by a specific age. That way if you need life insurance longer than you thought, or want to treat your policy as a cash asset, you can convert your coverage.
Whole life for 40-year-olds
If you plan to consider life insurance a part of your financial or retirement plan, you may consider getting permanent life insurance, like whole life. This type of policy builds cash value over time and pays out a death benefit when you die. However, it typically costs two to four times more than term life.
Life insurance rates for people in their 40s
The average cost for a $500,000, 20-year term policy is $32.36 for a healthy 40-year-old man, and $27.91 for a healthy 40-year-old woman. And, the average cost goes up $30 to $40 bucks by the time you reach 49 years old.
| 40 | Man | $14.89 | $32.36 | $56.50 |
| 40 | Woman | $18.07 | $27.91 | $47.16 |
| 41 | Man | $15.09 | $35.34 | $62.65 |
| 41 | Woman | $19.36 | $29.99 | $51.40 |
| 42 | Man | $15.31 | $38.65 | $69.27 |
| 42 | Woman | $22.10 | $35.16 | $60.86 |
| 43 | Man | $15.52 | $42.07 | $76.87 |
| 43 | Woman | $23.61 | $38.11 | $66.82 |
| 44 | Man | $15.71 | $45.92 | $84.69 |
| 44 | Woman | $23.61 | $38.11 | $66.82 |
| 45 | Man | $16.13 | $50.25 | $93.59 |
| 45 | Woman | $25.20 | $41.30 | $73.42 |
| 46 | Man | $32.89 | $55.16 | $102.05 |
| 46 | Woman | $27.05 | $44.57 | $78.95 |
| 47 | Man | $35.45 | $60.15 | $111.55 |
| 47 | Woman | $28.99 | $48.30 | $85.53 |
| 48 | Man | $38.49 | $65.82 | $123.10 |
| 48 | Woman | $31.30 | $52.51 | $93.68 |
| 49 | Man | $41.75 | $71.96 | $134.58 |
| 49 | Woman | $33.36 | $56.71 | $101.36 |
Rates are provided by Quotacy based on 20 year term policy, and valid as of April 2021 in all states except Montana.What’s the cheapest life insurance for 40-year-olds?
We averaged rates for a $500,000, 20-year term policy for healthy people 40 to 49 years old with 13 top life insurance companies and found that average rates with Protective life are the cheapest for both men and women in their 40s.
| AIG Life Ins (American General) | $46.30 | $37.33 |
| Banner Life (Legal & General America) | $45.70 | $36.90 |
| Cincinnati Life | $48.93 | $41.84 |
| Equitable | $49.70 | $41.06 |
| John Hancock | $49.41 | $42.03 |
| Securian (Minnesota Life) | $50.55 | $40.48 |
| Pacific Life | $46.19 | $37.33 |
| Principal | $46.49 | $37.22 |
| Protective | $45.58 | $36.52 |
| Prudential | $60.99 | $56.48 |
| SBLI | $51.13 | $38.26 |
| Transamerica | $47.56 | $37.88 |
| United of Omaha | $58.49 | $45.71 |
Rates are provided by Quotacy based on 20 year term policy, and valid as of April 2021 in all states except Montana.How much life insurance do people over 40 need?
Generally, life insurance experts suggest a number between five and 10 times your annual salary. For example, the median salary by age 40 is around $60,000.
That means a policy with $300,000 to $600,000 in coverage might be a good starting point. That coverage would essentially replace your salary for your family for five to 10 years, enough to get your spouse to retirement or find another source of income.
However, the coverage amount you need comes down to your financial obligations and how much you’re willing to pay in premiums. Here are a couple of steps to help you tally up a rough estimate:
- Assess your financial responsibilities now and in the future. Think about your mortgage and other existing debt, funeral costs and the everyday expenses of your family. If you have aging parents, you might want to consider the cost of their care, too.
- Subtract any savings or other income your loved ones will have. After subtracting your savings from your financial responsibilities, the number you’re. left with gives you an idea of how much coverage you may need to cover your debts and dependents.
What riders should I add to my policy if I’m over 40?
As a Gen X-er, you might want to consider customizing your coverage with riders such as:
- Waiver-of-premium rider. Pauses your premiums for a specified period of time if you become fully disabled and can’t work.
- Accelerated death benefit rider. Pays out a portion of the death benefit if you’re diagnosed with a terminal illness. Use the money for whatever you like, but the rider is designed to cover medical expenses.
- Long-term care rider. Allows you to access money from your death benefit to pay for a nursing home or other long-term care services. To qualify, you typically need to prove you can’t perform two of the six activities of daily living (ADLs) — which include getting dressed and using the bathroom.
Can I buy more than one policy?
Yes — as long as you can prove to your insurer that you need both policies and can afford to pay the premiums. This strategy is called “laddering,” and it involves taking out multiple term life policies to match your financial obligations. As those responsibilities drop off, the policies expire.
Let’s say you’re a Gen X-er with young children and a 30-year mortgage. You might buy a 20-year policy to carry your kids through college and a 30-year policy to cover your mortgage. That way, your loved ones won’t be burdened with those expenses if you die prematurely.
Bottom line
At 40, financial planning is probably at the forefront of your mind. If you have a family, business or financial assets, you might want to take out a life insurance policy. It can protect all of those things, plus give your family or employees a sense of security for the future. Life insurance becomes more expensive as you age, but if you apply now, there’s a good chance you’ll be offered a low premium.
As always, be sure to shop around to find the best life insurance policy that fits your needs.
Is very challenging when looking for life insurance! I’m a 42 year old soon to be 43 and I need the best coverage for my spouse and I. My health is not the best but not the worst either.
Hi Eddy,
Thank you for reaching out to Finder.
The page we are on offers providers where you could get a quote on a policy that would fit the coverage you need. Kindly review and compare your options on the table displaying the available providers. Once you have chosen a particular provider, you may then click on the “Get Quote” button and you will be redirected to the provider’s website where you can proceed with the application or get in touch with their representatives for further inquiries you may have.
Before applying, please ensure that you meet all the eligibility criteria and read through the details of the needed requirements as well as the relevant Product Disclosure Statements/Terms and Conditions when comparing your options before making a decision on whether it is right for you. Hope this helps!
Cheers,
Reggie