40 Year Term Life Insurance

• A 40-year term life insurance policy can provide long-term financial security.
• Premium remains the same for the entire policy term.
• Like other term policies, there is no cash value component. Only permanent policies build cash value.
• 40-year term insurance can be a good choice for young parents, people with long-term loans, or for those who would want to ease their retirement planning.

Unlike a permanent life insurance policy that offers you coverage for your whole life, term insurance comes with a defined period, typically between 10-30 years, with some insurance companies providing 40-year term policies. A 40-year term insurance policy is the longest period you can choose for term insurance, so it can be a good alternative to a more expensive permanent policy.During the term of 40 years, the premium stays fixed, and if you die within the term, your beneficiaries receive the full death benefit. In comparison to other term life policies, the risk associated with a 40-year term insurance policy is higher because of the longer coverage period.

When you apply for 40-year term life insurance, you choose a coverage amount and any optional riders.

Here is how it works:

• You apply for a 40-year term life insurance with your desired coverage amount (such as $100,000 or $500,000).
• The insurance company checks your health profile through accelerated underwriting or other medical exams, which may vary based on the company and the coverage amount.
• If approved, your policy begins. As long as you pay the premium on time, your term insurance remains active.

If you die during the 40-year term, your beneficiaries receive the death benefit. If you outlive the insurance, your policy expires and coverage ends. In some cases, you may be able to renew the policy or convert it to a permanent life insurance policy, based on your personal policy and your life insurance company’s rules.

Read: Does Term Life Insurance Have a Cash Value?

40-Year Term vs Permanent Life Insurance

A 40-year term insurance offers long-term protection at a comparatively lower cost, but permanent life insurance offers lifetime coverage. Here are some key differences between the two:

The cost of a 40-year term life insurance is generally the most expensive term period, since coverage lasts longer. The cost for each person varies depending on age, health profile, coverage amount, and your lifestyle preferences, including tobacco use.Here are estimated premium rates for a 40-year term policy with a coverage amount of $250,000.¹

Note: The above rates are averages only. Actual cost will vary by applicant and insurance company.

Read: $500K Life Insurance Policy

While a 40-year term life policy ensures financial security for a long time, it has some limitations. There are some benefits and drawbacks to consider:

Pros

• Long-term coverage: You get coverage for 40 years, covering benefits during prime earning years until retirement. Thus, it could be a good option for those in their 20s or 30s planning for long-term financial protection.
• Fixed Premium: There are no changes in premium during the policy tenure, making it easier to navigate through career changes, health conditions, and other changes in life that may impact your income.
• Long-term stability: 40 years provides solid financial protection for many people. As long as you pay your premiums on time, your policy remains active.

Cons

• Higher Initial Cost: Due to a long-term commitment of 40 years, premiums are higher than other term periods.
• No Cash Value: Unlike a permanent life insurance policy, a 40-year term insurance doesn’t build cash value.

Read: Cheapest Life Insurance For Seniors Over 70

If you’re still alive, the policy expires and coverage ends. If you no longer need coverage, you don’t need to do anything. But if you still have a protection need, you have a few options. You can:

• Renew or Convert: In some cases, your insurer might offer you an option to renew your policy at a higher price. Additionally, you might also have the option to convert your term insurance to a permanent life insurance policy.
• Buy a New Policy: You can also consider buying a new policy after your 40-year term insurance expires. Many people might choose a smaller whole life policy to provide final expense coverage.

A 40-year term life insurance is a good fit for those who are seeking long-term financial security. Here is when it can make sense, and when it may not be a good fit:

When It Makes Sense

• You’re in your 20s or 30s and want long-term security with a fixed premium.
• You have long-term debts like a 40-year mortgage, student loans, or family obligations that would last multiple decades.
• You’re the sole earner in your family and want to protect your family’s financial future.

When It Doesn’t Make Sense

• You’re over 45 or 50, as premiums may be too high – or the policy may not be available at all.
• You expect major financial changes in the next coming years.
• You want a policy that builds cash value. Term doesn’t build cash value, only permanent policies do.
• You plan to retire early and might not need coverage for the full 40 years. In this case, you might opt for a shorter term.

Read: Why you Need both Life and Disability Insurance

• Young parents in their 20s or 30s, to help ensure financial security for their children.
• People with long-term mortgages who want coverage throughout the entire loan period.
• Adults planning for retirement can use the 40-year term policy for financial protection of their children until they are grown, and save money separately in individual retirement accounts.