You can buy popular term lengths like 10 and 20 years from most life insurance providers. But 40-year term plans are only offered by Protective Life Insurance and Legal & General (also known as Banner Life).
A 40-year term life insurance policy is the longest term life insurance option available. This extended term length caters to specific financial planning needs but may only be suitable for some. It is suitable if you have long-term commitments — a 40-year term provides extended security. Other term lengths may be more appropriate for if you have shorter-term financial goals or are nearing retirement.
Table of Contents
- Understanding 40-Year Term Life Insurance
- Life Insurance Companies That Offer 40-Year Term Life Insurance
- Advantages and Disadvantages of 40-Year Term Life Insurance
- Reasons to Buy a 40-Year Term Life Insurance
- Alternatives to 40-Year Term Life Insurance
- FAQ: 40-Year Term Life Insurance
Key Takeaways
Life insurance companies offering 40-year term life insurance policies are rare. You can currently only purchase these from two companies: Protective Life Insurance and General & Legal.
A 40-year term life insurance plan is significantly more expensive than a 10- or 20-year term life insurance policy. If the cost isn’t something you can handle, you may want to consider a policy with a shorter term length and lower rates.
Evaluate your unique circ*mstances to determine whether a 40-year term life insurance plan fits your needs.
Understanding 40-Year Term Life Insurance
Term life insurance is a type of life insurance policy providing coverage for a specific period, or "term." Beneficiaries receive the death benefit if the policyholder passes away within this term. While terms typically range from 10 to 30 years, 40-year term life insurance represents the longest term life insurance policy available.
Ideal for those with long-term financial obligations and commitments, 40-year term life insurance ensures stability over decades. However, this extended duration means a longer commitment and the potential for higher premiums. Selecting the correct term length involves weighing immediate needs against future security, so understanding these dynamics is important.
Term Length and Life Insurance Policy Costs
Term length is among the significant factors affecting the cost of life insurance. Generally, the longer the policy term, the higher the premium. This is because longer terms, such as a 40-year life insurance policy, encompass a more significant risk period for the insurer. As a result, 40-year term life insurance rates are usually higher than costs for shorter terms like 10, 20 or 30 years. The increased premiums reflect the extended coverage duration and the higher probability of an insurer having to pay out the policy over a longer time frame.
40-Year Term Life Insurance vs. Permanent Life Insurance
When choosing between 40-year term life insurance and permanent life insurance, it’s important to understand the differences and how they align with your long-term financial goals. A 40-year term life insurance policy, as the longest term life insurance option available, offers coverage for a specific period, ideal if you who need protection for extensive but finite commitments. Once the term expires, so does the coverage, unless it is renewed or converted.
By contrast, permanent life insurance, which includes options like universal life and whole life insurance, offers a lifetime of coverage along with a savings component that can grow over time. This makes it one of the largest life insurance policies in terms of potential financial value and flexibility. Permanent insurance is typically more expensive than term insurance due to its lifelong coverage and investment benefits.
Choosing between 40-year term life insurance and permanent life insurance often depends on factors such as age, financial needs and desire for an investment component. A 40-year term life insurance policy provides a more affordable and straightforward protection option suitable for specific long-term planning needs, while permanent insurance offers enduring security and potential wealth accumulation.
Life Insurance Companies That Offer 40-Year Term Policies
Protective Life and Legal & General are the only companies that offer 40-year term insurance policies. These two companies only made this policy length available to the market relatively recently. These policies are one of the largest life insurance policies available in terms of duration — the longest-term life insurance that most companies offer is 30 years.
WHY 40-YEAR TERM LIFE INSURANCE IS SO RARE
The life insurance industry is conservative by nature, so insurers rarely introduce new products. Forty-year term life insurance is a newer life insurance option on the market, in part because of this conservatism. Longer terms also comprise a greater period of risk for insurers.
Advantages and Disadvantages of 40-Year Term Life Insurance
Understanding the advantages and disadvantages of 40-year term life insurance is important for making an informed decision, helping you weigh whether this type of policy fits your needs.
- Extended Coverage: Ensures long-term financial protection
- Fixed Premiums: Premiums stay consistent throughout the term
- Estate Planning: Beneficial for long-term estate planning
- Debt Security: Ideal for covering long-term debts like mortgages
- Higher Cost: Generally more expensive than shorter terms
- Inflexibility: Less adaptable to changing life circ*mstances
- Overinsurance Risk: Potential of paying for unnecessary prolonged coverage
- Limited Provider Options: Only a few insurers offer this term length
Reasons to Buy 40-Year Term Life Insurance
Carefully consider the policy length you need, especially given the vast difference in average cost between term lengths. You’ll want to evaluate your circ*mstances to determine whether 40-year term insurance is the best option for you.
When You Can Benefit from Each Policy Length
- Your children are between the ages of 10 and 15.
- You have fewer than ten years remaining on your mortgage.
- You plan to retire within the next five to 10 years.
- You can be financially free (and thus self-insured) in 10 years.
- Your children will be graduating from college within 20 years.
- You have sizeable debt co-signed by your spouse or your parents.
- You’re in your 40s.
- Your family is on a strict budget.
- You want a higher amount available to cover final expenses.
- You’re in your twenties and planning to start a family.
- You have a special needs child.
- You don’t want to worry about policy renewals.
When determining the term length you’d like to take on, it’s a good idea to anticipate your future financial commitments, like your children’s educational expenses. A 40-year term life insurance policy is not for everyone. Although 10- and 20-year term lengths are more popular than lengthier terms, these may not be the best options if you anticipate long-term expenses.
Reasons Not to Buy 40-Year Term Life Insurance
While 40-year term life insurance offers long-term security, it may only suit some people's unique financial situation.
Older Applicants
Older individuals face higher premiums due to age and health factors. Additionally, the extended term of a 40-year term life insurance policy may exceed their life insurance needs.
Individuals With Short-term Debts
Short-term policies are often more practical and cost-effective for those with financial obligations spanning only a few years.
Workers Nearing Retirement
Workers close to retirement may not need the extensive coverage offered by a 40-year term life insurance policy as their financial liabilities decrease and savings increase.
People With Changing Health Profiles
Individuals with health conditions that might change or improve could benefit from shorter terms or policies with more flexible coverage options and premium structures, avoiding the lengthy commitment of a 40-year term life insurance.
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Alternatives to 40-Year Term Life Insurance
Several alternatives are available for those who find a 40-year term life insurance policy unsuitable. Each of these alternatives caters to specific needs and circ*mstances, offering different levels of coverage, flexibility and cost considerations.
1
Shorter-Term Policies (10 and 30 Years)
These policies are designed for individuals with specific, shorter-term financial goals. They are ideal for those who anticipate significant changes in their financial responsibilities over time, such as paying off a mortgage or funding children's education.
2
Term Life Insurance With Renewable and Convertible Options
These policies provide the flexibility to renew your coverage or convert to a permanent policy at the end of the term. Ideal for those who might want to extend their coverage or switch to a policy with an investment component.
3
Decreasing Term Policy
Decreasing term life insurance is tailored for individuals whose insurance needs decrease over time, such as those primarily concerned with covering a diminishing debt like a mortgage.
4
Whole Life Insurance
This type of policy offers lifelong coverage and includes a savings component, which can accumulate cash value. Whole life insurance is an excellent choice for those seeking both a death benefit and a potential cash value for estate planning or retirement.
5
Universal Life Insurance
Universal life insurance is flexible and allows policyholders to adjust their premiums and coverage amounts as their financial situation changes. This makes it suitable for those who expect their insurance needs to fluctuate over time.
6
Group Life Insurance
Often provided as a benefit by employers, group life insurance can be a cost-effective way to obtain short-term coverage. It's a good option for employees seeking a basic level of insurance without the need for a long-term commitment.
FAQ: 40-Year Term Life Insurance
A 40-year term life insurance is relatively new, and it’s an option that is not available through most insurance providers. Below are common questions about these policies.
Which life insurance companies offer 40-year term policies?
There are only two companies that offer 40-year term life insurance policies. These are Protective Life Insurance and General & Legal (also known as Banner Life).
What is the longest available coverage length for term life insurance policies?
Presently, the longest available term length is 40 years. Not all insurers offer this type of policy.
What happens after the 40-year term life insurance policy ends?
After a 40-year term life insurance policy ends, the coverage ceases unless it is renewed or converted into a permanent policy. Renewal or conversion options depend on the policy's terms and may require higher premiums due to increased age.
About Mark Fitzpatrick
Mark Fitzpatrick has analyzed the property and casualty insurance market for over five years, conducting original research and creating personalized content for every kind of buyer. Currently, he leads P&C insurance content production at MoneyGeek. Fitzpatrick has been quoted in several insurance-related publications, including CNBC, NBC News and Mashable.
Fitzpatrick earned a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his knowledge of economics and insurance to bring transparency around financial topics and help others feel confident in their money moves.
