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Why You Should Have Life Insurance in Your 40s

By the Bestow Team·December 01, 2021·6 Minute Read

In this Article

Between juggling your career, your bills, and raising your family, buying life insurance is probably one of those things that’s been on your “I’ll get to that tomorrow” list for a long time.

Whether it’s the cost of life insurance or a lack of time that has kept you from signing up, life insurance coverage can be an important component of financial planning in your 40s. Coverage could help provide a safety net for your loved ones, as well as peace of mind for you.  

Should You Have Life Insurance at 40?

It really depends. While you’re hitting your stride on both the personal and professional front, you’re also likely “sandwiched” with responsibilities: not only tending to your kin, but also caring for aging parents. If you fit in one or more of these categories below, you probably need life insurance.

1. You Have Debt

Should something happen, a life insurance policy can cover your debt (like your mortgage) so it’s not passed on to your loved ones.

According to MONEY Magazine, the average debt 35 to 44-year-olds carry is a staggering $133,100 and $134,600 for those between the ages of 45 and 54. Besides a mortgage, this includes credit card debt, student loans, among other forms of debt.

A life insurance policy can pay off your mortgage, credit cards, auto loans — any debt that could become a burden for your loved ones. One benefit of buying life insurance in your 40s is that you likely have a big picture view of your finances, meaning you can buy the amount of coverage you know you’ll need.

2. You Have Kids Who Depend on You

Forty-year-olds can be empty nesters, teen wranglers, and new parents.

Whether your household has one or two income-earners, there are valid reasons why all parents should considering getting coverage. There are day-to-day expenses to consider (childcare, housekeeping, chauffeuring) as well as future expenses that you need to plan for (college).

As you might imagine, higher education is only getting more expensive. The cost of a public, four-year university for the 2020-2021 school year — which includes tuition and fees, room and board — was $25,615. Do your kids have their sights set on a private, liberal arts college? Then you’re looking at a hefty chunk of change — $53,949.

Paying for day-to-day expenses adds up quickly, too. Parenting is a tough job in itself. If stay-at-home moms were paid a salary, they’d earn over $143,000 a year! A life insurance policy cannot replace you, but it can provide finance assistance to get the help your loved ones will need.

3. You Want To Leave An Inheritance For Your Children

Unless you’re a millionaire or you’ve managed to stash away substantial assets (and if so, congrats!), a life insurance policy could be a way to help leave a meaningful inheritance to your kids. If you die before your policy has ended, your kids (if they’re over 18 years old) do not have to pay income tax on the death benefit they receive. So, if you pay life insurance premiums for a $500,000 policy, they could actually receive $500,000 in the event of your death. 

4. Your Parents Depend on You, Too

As parents age, adult children have to make tough decisions. If your parents do not have any savings or investments to cover their elder care, you may have to pay for their expenses out-of-pocket every month. Assisted living and nursing homes are expensive, ranging on average from $41,000 to $78,000. And in-home care still adds up to nearly $20,000 a year.

What would happen if you were no longer around to provide financial assistance?

There are a variety of insurance options for elder care. Term life insurance is one of the most affordable because it’s simple: pick a term and a coverage amount and pay that until the policy expires. The downside is it only pays if the insured policyholder (you) passes away and the beneficiary files a claim; you cannot withdraw funds or take out a loan. But because there is no cash value component, your monthly premium is much lower and the coverage amount is the same throughout the entire term.

5. You Want To Ensure Your Final Expenses Are Covered 

Funerals are not cheap – the average funeral costs between $7,000 and $12,000.Buying life insurance could help prevent your loved ones from having to bear those costs alone during an already tough time.

Final expenses can include more than just funeral expenses, too. Medical bills for end-of-life care, special memorial services, and even travel costs so your loved ones are able to attend a memorial service are all things that can be covered by your life insurance policy.  

What’s The Best Life Insurance For A 40-Year-Old?

There are a few different types of life insurance to consider.  

Term Life Insurance 

Term insurance is simple insurance. You pick a term length and a coverage amount, then just pay the monthly premium until you pass away or you outlive the term and the policy expires. Because term life insurance lasts for a set term, it is often the most affordable life insurance option. 

Term length options are usually split into 10-year terms, 15-year terms, 20-year terms, 25-year terms, and 30-year terms. Term life insurance policies could be a smart option for people who have a set length of time that others depend on their income, like parents or new homeowners with a mortgage. 

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Whole Life Insurance 

Whole life insurance is a form of permanent life insurance, meaning that your loved ones are guaranteed a death benefit as long as you keep up with your monthly payments. Some whole life insurance policies also have a cash value component. 

Because whole life insurance doesn’t expire, monthly rates are usually more expensive than term life insurance. While an affordable term life insurance policy is often sufficient for some, for those who need a guaranteed death benefit, the higher premiums of whole life insurance may be worth it. 

Universal Life Insurance 

Universal life insurance is another type of permanent policy, but with an investment component. Like whole life policies, universal life typically has higher premiums than term life. However, universal life is more flexible with premium payments, payout options, and a cash value component. 

Term Life Insurance Rates For 40 Year Old Males For $500k In Coverage

Term Life Insurance (20-Year Policy) Whole Life Insurance Universal Life

Term Life Insurance Rates for 40 Year Old Females For $500k In Coverage

Term Life Insurance (20-Year Policy) Whole Life Insurance Universal Life
Quotes reflected are an example. Your actual premium will be determined by underwriting review.

What Impacts Your Premium Rates?

Your age, medical history, family health history, lifestyle, as well as the amount of life insurance you need all impact your premiums. You usually get the best rates as a young adult in good health, as you are less likely to die before your policy expires.

One way to help lower premiums is by improving your health and keeping life-endangering activities to a minimum. A smoker, for instance, will be quoted much higher premiums than a non-smoker.  

No Exam Life Insurance Rates

No exam policies do not require candidates to undergo a medical exam in order to qualify for coverage. Instead, applicants answer a questionnaire about their health and medical history. 

This can be much more convenient for the typical applicant (hello, no visiting the doctor), but no medical exam policy rates can sometimes be a bit higher than other insurance products. That’s because insurance companies use those medical exam test results to help assess applicant risk and establish premium rates. No test results can mean less information for insurers to go off of. 

But don’t fret, you still may be able to find very affordable rates. Bestow, for example, uses cool technology combined with your provided medical history to offer many applicants surprisingly affordable rates with no medical exam required.

Get Started With Your Life Insurance Policy Today

With Bestow, you can get a term life insurance quote in seconds, apply completely online in minutes, and purchase up to $1.5 million in coverage if approved (most applicants get a same day decision). 

If you need guidance deciding how much life insurance coverage you need, our advisors are here for you. They don’t work on commission, so you’ll get all the info you need without any pressure to purchase anything. 

Want to learn more about Bestow? Check out real customer reviews here, and discover more about life insurance in the Bestow Learning Center.