When you apply for life insurance, the company is going to review dozens of different factors to determine how much they should charge you every month. It’s important to ensure that you’re getting the best plan at the lowest rates. Life insurance is one of the most important investments that you’ll ever make for your loved ones, and nothing should keep you from getting that protection. One of the biggest factors that the company is going to review for life insurance is your age, and a lot of people assume that they older you get, that life insurance becomes too expensive.
Many people in their forties have heard that life insurance premiums are just not affordable. The fact is that the premiums you will pay in your forties are not that much higher than those you pay in your thirties. Life insurance at 40 is an important and economical investment in your family’s financial security.
Many in their forties have attained a certain degree of financial success. You are paying down your debt while building your savings accounts. You are almost certainly thinking seriously about retirement savings. College expenses for your children may be looming on the horizon.
You have big plans for your family that count on your financial support to be realized. Life insurance coverage can ensure that the income that powers these ambitions will always be there no matter what happens to you.
In this article we will briefly address three common and important questions clients have for us when they are considering life insurance for their family.
- Why do I need life insurance?
- How much life insurance do I need?
- How much will my life insurance cost?
Why do I Need Life Insurance at age 40?
Table of Contents
You don’t want to leave a financial burden to those who depend on you if you pass unexpectedly. This is the reason people buy life insurance. We will quickly look at four common coverages we see clients most interested in:
- income replacement
- college education expenses
- mortgage and other large debt
- small business
If you were to die unexpectedly your family would lose not only lose a parent and spouse, but also the yearly income you bring to your household. Income replacement is the primary concern of many people who seek life insurance.
Your children’s higher education is an important part their success as an adult and you want to be sure they have access to this important tool as they grow into young men and women. College education expenses factor prominently into many client’s life insurance calculations.
Home ownership is a big part of growing your family. It also a big financial commitment when you enter into a home mortgage. We have many clients who want to make sure that tens or hundreds of thousands of dollars in debt does not end up falling into the laps of their loved ones. We have clients who insure their mortgage with term and permanent policies. If you are interested in a permanent policy to cover your mortgage read our article, “Indexed Universal Life for Mortgage Protection?”
Many small businesses purchase life insurance to protect themselves from the unexpected death of a partner. These policies can make the difference between bankruptcy and continued success of a business that you have worked hard to build. Term life insurance can be an affordable solution.
How Much Life Insurance Do I Need at age 40?
We will look at some simple math to address income replacement needs, but the amount of coverage you will need to cover other financial obligations mentioned here will require a consultation with your agent. Securing the life insurance and critical illness coverage that you and your loved ones need can be a complex process. There are many questions to be answered.
If you want to have coverage for you children’s education: When will your children be going to college? What school will they attend? Will you provide only for tuition and books or cover all their higher education expenses?
The amount of coverage required to fund a buy sell agreement between partners in a small business will of course vary widely depending on the size of the organization. Generally, the amount of coverage for a large debt equals the amount of the debt. Again, the advice of your agent will help to guide you to the correct coverage for you.
The amount of coverage you might require to replace your income can be approximated with a simple formula. Divide the yearly income you would like to leave your family by a yearly rate you can rely on that benefit earning.
A quick example. You and your agent have decided that if you were to die unexpectedly, your family could continue in the lifestyle you presently provide them with a supplemental yearly income of $30,000. Using a conservative interest rate of 4%, the math is as follows.
———– = $750,000
The actual process is a bit more complicated, but this is a good way to get in the ball park of the coverage you will require.
How Much Will My Life Insurance Cost at age 40?
At 40, if you are in at least average or even better in above average or excellent health, then you can count on very affordable life insurance premiums.
We have put together four tables with some sample monthly life insurance premiums. These premiums are for term life insurance for a non-smoking, 40-year-old male and female. The first chart shows premiums for a preferred plus health category, while the second shows standard rates.
Underwriting is when life insurance companies evaluate a potential client’s risk and then assign them to an appropriate health category. This classification may also be called a risk rating, a health rating or risk category. Some clients are deemed to be a better risk to live a long life than others and will pay lower premiums because the life insurance company anticipates paying out fewer claims to this group of individuals.
We show term lengths of 10, 15, 20, 25, and 30 years, with face values (benefit amounts paid to your family) of $100,000, $250,000, $500,00 and $1,000,000. These are only sample premiums. Your actual premium will be based on your unique risk how it is assessed by life insurance companies.
Term life insurance rates for males and females at age 40
|Male Age 40|
Preferred Plus Rates
|30 year term||$15||$28||$50||$94|
|Term to age 95||$60||$113||$218||$409|
|30 year term||$28||$51||$95||$180|
|Term to age 95||$76||$161||$306||$575|
Preferred Plus Rates
|30 year term||$13||$22||$39||$72|
|Term to age 95||$54||$93||$167||$310|
|30 year term||$22||$40||$73||$138|
|Term to age 95||$66||$130||$248||$471|
Life Insurance at age 40
Hopefully, these sample quotes and this article have given you look at some life insurance basics and the knowledge to proceed with an independent agent. You may have different questions now than you did before. That’s to be expected. At Ogletree Financial Services we have answers.
You have decided that life insurance is important for your family’s financial future. You are in the right place to get that done. Knowledge, experience and integrity make Ogletree Financial Services a smart choice to secure the life insurance coverage your loved ones deserve.
We know that shopping for life insurance is not the most fun experience, but we are here to make it as quick and simple as possible. Unlike traditional insurance agents, we are a group of independent insurance brokers. That means that we work with dozens of highly rated companies across the nation. Regardless of your age, we can find an affordable life insurance plan to meet your needs. We can save you both time and money on your life insurance coverage.
You never know what’s going to happen tomorrow, which means you shouldn’t wait another day to get the proper insurance in place. If you have any questions about getting life insurance at 40, or you’re ready to get the process started, please contact us today.
Frequently Asked Questions
How much does life insurance cost at age 40?
A sample monthly premium for a $500,000 20-year term life insurance policy at a standard non-tobacco rate is $52.98 for a female and $60.46 for a male. These are sample premiums, yours would be based on your personal underwriting with the life insurance carrier.
Why do I need life insurance at age 40?
You don’t want to leave a financial burden to those who depend on you if you pass unexpectedly. This is the reason people buy life insurance policies. Four common reasons for coverage we see clients most interested in is income replacement, college expenses, small business owner, and mortgages.
Where do I start looking for life insurance at age 40?
If you have decided that life insurance is important for your family’s financial future, you are in the right place to get that done. Knowledge, experience and integrity make Ogletree Financial Services a smart choice to secure the life insurance coverage your loved ones deserve.