Generally speaking, one of the biggest complaints about Term Life Insurance has been the maximum policy term of 30 years.
Knowing how inexpensive term life can be, you would think that all major insurance companies would come up with a longer-term right?
Well, a couple of them have, and we are going to drill down into these new term policies to see who will benefit the most and if they are priced right like most other term products.
When you think about it, having a 40-year Term Life insurance policy could be a game-changer for individuals who love the low price and guaranteed benefits.
The life insurance industry is ultra-conservative, and it’s unusual for the major players to offer new products. However, Banner Life and Protective Life have recently decided that the marketplace is ready for 40-Year Term Life Insurance.
40-year term life insurance is not for everybody, and not everybody can qualify to purchase it. But for those who can, having inexpensive life insurance that is guaranteed for 40 years will likely be a game-changer, especially for individuals purchasing life insurance to replace their income.
Instead of having to renew or convert your policy at a much higher rate, 40-year term policyholders will have an additional ten years (above a 30-year policy) to enjoy very low insurance rates.
In the past, if you purchased a 10 or 20-year policy, most policyholders were caught off guard by the renewal offer if they hadn’t already converted their policy.
This sticker shock results from renewing your policy 10 or 20 years after initially purchasing it at a substantially younger age.
Also, it’s important to remember that when you renew a term policy, you are renewing it on an annual basis, which means the rate will climb higher year after year.
As we mentioned earlier, 40-year term life insurance is not a great fit for everyone, especially applicants with medical issues and those who prefer no medical exam life insurance.
Even if an applicant qualifies for accelerated underwriting, the process can be a little intense compared to a 10, 20, or 30-year policy.
Moreover, if the financial risk you are planning to mitigate will last 30 years or less, it doesn’t make a lot of sense to pay higher rates for a 40-year term policy when a 10, 20, or 30-year policy serves the same purpose.
Since the two companies that offer 40-year term insurance will only issue policies for applicants who are 45-years old and younger, applicants who are 46 and older can still purchase a 30-year term life insurance policy from a host of national carriers.
Term life insurance is a straightforward life insurance product with few moving parts. Since the policy does not have a cash component or earn interest from the insurer, the only concern to deal with is the cost of insurance and the policy fee.
Since one of the primary factors used to calculate the insurance premium is the length of the policy term, 40-year term life insurance will cost more than a 10, 20, 25, or 30-year policy.
40-year term life insurance offers a guaranteed death benefit and a level premium that can never change for the life of the policy as long as the periodic premiums are paid.
There are several differences in the 40-year term policy offered by Banner Life and Protective Life:
Banner Life | Protective Life | |
---|---|---|
Eligible Issue Ages | 25 – 45 Non-Tobacco 20 – 40 Tobacco | 18 – 45 Non-Tobacco 18 – 40 Tobacco |
Minimum Face Amount | $100,000 | $100,000 |
Available Riders* | Accelerated Death Benefit Child Rider Waiver of Premium Term Rider | Accelerated Death Benefit Child Rider Waiver of Premium Income Provider Option |
Health Classes | Preferred Plus Preferred Standard Plus Standard Preferred Tobacco Standard Tobacco | Select Preferred Preferred Standard Tobacco |
*Riders Vary by State |
As with any life insurance product, there will be pros and cons that will typically depend on your purpose for purchasing life insurance in the first place.
What may be a disadvantage for Applicant A might be advantageous for Applicant B. The pros and cons are typically a result of why you need life insurance rather than a flaw in the product.
Advantages
Disadvantages
Although all term life insurance works the same way, the primary difference between a 40-year term policy and a 35-year term policy is the length of the term and the rates.
The underwriting process for both policies is basically the same, and the number of optional riders available has been reduced.
Although you can easily determine the cost of a 40-year term life insurance policy using our instant quote form on the right side of the page, we have listed the rates for a \$500,000 policy for several age groups using the best underwriting class. Monthly rates are rounded to the nearest dollar.
Age of Applicant | Banner Life | Protective Life |
---|---|---|
Male age 30 | $52 | $53 |
Male age 35 | $64 | $70 |
Male age 40 | $114 | $113 |
Male age 45 | $189 | $187 |
Age of Applicant | Banner Life | Protective Life |
---|---|---|
Female age 30 | $39 | $39 |
Female age 35 | $53 | $52 |
Female age 40 | $91 | $90 |
Female age 45 | $145 | $145 |
Insurance shoppers in the 21st Century can shop for and then purchase life insurance quicker than ever before.
Independent life insurance professionals like LifeInsure.com represent most of the highly-rated insurance companies and offer instant quoting right on our website.
We encourage you to take advantage of our instant life insurance quoter, and we will follow up to answer any questions and help you apply for a low-cost Term Life Insurance policy today!
40-year term life insurance is a type of life insurance policy that provides coverage for a duration of 40 years. It offers a longer coverage period compared to traditional term life insurance policies.
A 40-year term life insurance policy functions by providing a death benefit to the beneficiaries if the insured individual passes away during the 40-year term. Premiums are typically paid on a regular basis to keep the policy in force.
Several factors can impact the insurance rates for a 40-year term policy, including the insured’s age, medical history, coverage amount, and term length. Insurance companies use these factors to assess the risk and determine the premium.
Life insurance companies consider various factors when determining the term length for policies, such as the insured’s age, financial needs, and future obligations. Longer terms may result in higher premiums but offer extended coverage.
A rider is an additional provision that can be added to a life insurance policy to customize coverage based on the policyholder’s specific needs. Common riders include accelerated death benefits and waiver of premium.
Not all insurance companies provide 40-year term life insurance policies. It is essential to compare offerings from various insurers to find a policy that aligns with your coverage requirements and budget.
Term insurance provides coverage for a specified period, such as 40 years, while whole life insurance offers lifelong coverage with a cash value component. Term policies tend to be more affordable, whereas whole life policies offer additional benefits.
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