Term life insurance is a good choice for people who want the most affordable life insurance coverage for a specific concern, such as cover for their working years or the length of a mortgage.
Ordinary term insurance policies have terms of 10, 20, and 30 years, but is a 30-year term the longest that you can get?
In this article, we will discuss the various life insurance terms, including which ones cover the most years and whether or not the longest term is always the best option.
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What Is Term Life Insurance?
Term life insurance policies are contracts between policyholders and insurance companies that financially cover people in the event of their death. The policyholder pays the insurer a monthly premium and when they die, the life insurance company pays out a death benefit.
The difference between term and whole life insurance is that term life insurance plans only offer life insurance coverage for a fixed period, which varies and depends on your life insurance company.
For year-by-year coverage, 10, 15, 20, and 30 years are some of the standard lengths of coverage that consumers can get with a term life insurance policy.
Terms You Should Know:
Premiums: These are the amounts that policyholders must pay on a monthly or annual basis in order to get coverage.
Death benefit: This is the amount paid to the beneficiary of an insurance policy after the policyholder’s death.
Beneficiary: A person who receives the death benefit (payout) from a life insurance policy in the event of the policyholder’s death.
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What Is the Longest Life Insurance Term I Can Buy?
Term life insurance is usually more affordable than permanent life insurance and is good for short-term financial needs.
Even though it's very rare, the longest term length offered in the life insurance industry is currently 40 years. A 40-year term life insurance policy is a great option for people who want to keep their families financially safe well into their retirement years.
At a glance, purchasing a 40-year term life insurance policy may seem like the best option. However, it isn’t for everyone, because it is more expensive than shorter term policies
Visit PolicyScout’s life insurance hub for more information about this kind of life insurance and learn what issues might factor into your decision to purchase it.
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Which Life Insurance Companies Offer 40-Year Term Policies?
Term lengths like 10, 20, and 30 years can be bought from most life insurance providers. If you want to buy a 40-year term life insurance policy, according to our research there are only a couple of companies that sell it.
If you are looking for a 40-year term insurance plan, your only two options are:
Legal & General (also known as Banner Life)
Protective Life Insurance’s 40-year Term Life Insurance
Protective Life Insurance has a lot of different policies. Outside of term life insurance, it also offers universal and whole life insurance options.
You can also add riders to your policy that match your needs. If you buy their term life insurance (The Protective Classic Choice Term), you can choose from seven different term lengths, each available in 5-year increments:
10 years
15 years
20 years
25 years
30 years
35 years
40 years
With their term policies, your premiums will stay the same for the whole time you're covered. Your policy's coverage can range from $100,000 to $50 million.
Depending on the length of your policy, you may be able to convert a term policy to a permanent life insurance plan without having to take another medical exam.
What Is a Rider?
Riders are the additional components of a life insurance policy that help maximize the policy benefits and coverage.
Legal & General’s 40-Year Term Life Insurance
Legal & General offers universal and whole life insurance, as well as term life insurance, in the same way that Protective Life Insurance does. There are no increases in premiums for their term policies, and the death benefit is guaranteed up to the age of 95.
How Long Do Whole Life Insurance Policies Last?
Most whole life insurance policies are written to expire at the age of 100. But if you live longer than that, you have a couple of options.
For example, if you are younger than 85, you could do a 1035 exchange for a new policy that lasts until age 121.
The minimum life insurance coverage amount is $100,000 and you can choose from the same seven term lengths that Protective Life Insurance provides.
You can change your term life insurance to permanent life insurance as long as your policy is still active or you reach the age of 70, whichever comes first.
What Are Level Premiums?
Level-premium insurance is a type of life insurance in which premiums stay at the same price throughout the term.
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Life Insurance Rates of a 40-Year Term Policy
One of the main things insurers use to set premium prices is the length of the policy. It costs more to get 40-year term life insurance than shorter term insurance because it covers you for a longer time.
For example, the average monthly premium for life insurance for a 30-year-old male in good health will be:
20-Year Term Policy: $25
40-Year Term Policy: $53
It costs a healthy 30-year-old man about twice as much each month to buy a 40-year term life insurance policy than it would cost him to buy a plan that lasts for 20 years.
Look at several factors before you decide if a 40-year term life insurance policy is right for you. These include things like whether the premium fits your budget and whether you have a mortgage or kids to consider, too.
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Do I Need a 40-Year Term Life Insurance Policy?
Because the average life insurance rates for term lengths vary so widely, it's critical to think carefully about how long you'll need your insurance policy to last.
You'll need to think about your own situation to see whether a 40-year term insurance plan is the best choice for you.
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Typical Type of Person for Each Policy Term Length
There are certain characteristics that usually fit the different policy term lengths, such as:
Policyholder’s age
Age of children
Length of mortgage
When they are planning to retire
| 40-Year Term | 20-Year Term | 10-Year Term |
|---|---|---|
| You’re planning to start a family. | Your children will be graduating from college within 20 years. | Your children are between ages 10 and 15. |
| You’re in your 20s. | You’re in your 40s. | You plan to retire within the next 5–10 years. |
| You want a higher amount available to cover final expenses. | You have sizeable debt cosigned by your spouse or your parents. | You have fewer than 10 years remaining on your mortgage. |
| You have a special needs child. | Your family is on a strict budget. | You can be financially free (and thus self-insured) in 10 years. |
| You don’t want to worry about policy renewals. |
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Reasons to Buy 40-Year Term Life Insurance
An Alternative to Permanent Life Insurance
In a lot of cases—especially if you get life insurance later in life—a 40-year term life insurance policy is about the same length as whole or universal life insurance plans.
If you don't mind that your policy doesn't have a cash value, it's a cheaper way to get life insurance.
What Is Cash Value?
The portion of your policy that earns interest and may be available for you to withdraw or borrow against in case of an emergency.
Retirement
Everyone who has a term life insurance plan can keep renewing it after the term ends. However, you'll have to renew it every year, which means you'll have to pay more for your insurance each year.
If you buy a 40-year term life insurance policy in your 40s, you'll be covered until you're in your 80s. This means that you most likely won't have to renew your policy.
Convenience
If you get a 40-year term life insurance policy, it could be the only one you’ll ever have to buy in your lifetime. This means that when your current one runs out, you will be at an age where there is a very small chance that you will have to renew it.
An Alternative to Final Expense
Term life insurance and a final expense plan are very different. A final expense plan mostly pays for the burial costs. A 40-year term insurance policy, on the other hand, can give your family a reasonable payout when you die and they can spend it in whichever way they want.
If any of the four above points sound appealing, you might want to think about getting 40-year term insurance. However, there are still important aspects to think about.
Ultimately, there is no shortcut to determining whether a 40-year term life insurance option is right for you. You’ll have to consider various factors to ensure you’re making the right choice.
Even though a 40-year term insurance policy is cheaper than permanent life insurance, the difference in life insurance costs between that and a 20- or 30-year term plan can be significant.
In this case, you may want to choose a shorter term, because it means lower premiums, which could help you save money each month.
Reasons Not to Buy 40-Year Term Life Insurance
The price of a term life insurance policy is based on how long the policy lasts. A 40-year policy will cost more than a 10-, 20-, or 30-year policy.
There are only two life insurance companies that offer a 40-year term policy. The competition for those policies is limited.
Because it has a longer policy term than other policies, the conversion rider is more expensive than other policies.
People with health problems will find that a 40-year term policy is too expensive for them.
Tips for Finding the Best Term Life Insurance
When you buy term life insurance, the price will naturally be an important consideration. After that, it's important to look at the features and benefits that a policy will offer when you buy it. Let's look at a few tips on how to find the best term life insurance for you:
Determine how much life insurance you need: There are many free life insurance calculators available online to help you determine how much life insurance you need.
Compare quotes from multiple insurers: Depending on your age and health, the best term life insurance options for you might be different than those of someone else. Make sure you compare term life quotes from different companies to figure out what a good price is for you.
Ask about the accelerated death benefit: Most life insurance policies these days include an accelerated death benefit rider at no extra cost.
What Is an Accelerated Death Benefit?
An accelerated death benefit lets you access a portion of your life insurance policy's death benefit while you're living. Typically, you must be diagnosed with a chronic illness or terminal illness to trigger this benefit.
Ask about other living benefits: Some of the best term life insurance policies will also provide critical illness and chronic illness benefits.
Ask about term life conversion: The best term life insurance companies will offer you some permanent life insurance policy choices. Check the rules for conversion. You usually must make a conversion during your term period, and most companies also have an age cap.
Find out the policy renewal rules: Renewal will likely be charged at a higher premium annually, and it might become unaffordable. So don’t count on renewing when you buy the policy. Instead, try to buy a term length that’s best for your needs.
Where Can I Learn More about Different Life Insurance Policies?
At the end of the day, there is no shortcut to figuring out if a 40-year term life insurance option is right for you. You'll have to think about a lot of things to make sure you're making the right decision.
To learn more about term life insurance and the different term lengths that are available, head to PolicyScout’s life insurance hub.
We have loads of articles that will help you understand insurance policies, their cash values, borrowing against them, and enrollment options.
Send your questions to Help@PolicyScout.com or call us at 1-888-912-2132 to get personalized assistance from our team of life insurance agents.
