Life Insurance

Why It’s Important To Have Life Insurance In Your 40’s

Sep 15, 2020
As a 40-something, you’re likely in the midst of some financially demanding years, with a complex mix of responsibilities and assets on your plate that you want to protect.

Providing for kids and significant others, caring for aging parents, saving for retirement and higher education, and paying off mortgages and debt, to name a few. You may be earning your best income yet to account for these expenses, but what would your loved ones do if your income were to vanish? In the unfortunate event of your untimely passing, ensuring you’ve locked down life insurance in your 40’s will help your family stay financially secure.

Our Financial Legacy Index found that 52 percent of Americans often worry about the financial situation they’ll leave behind for their children if they were to pass away. 33 percent said their family would be left financially unstable or even bankrupt in the event of their death. If either of these describe you, life insurance can play a major role in securing your financial legacy and providing peace of mind if something were to happen to you. Here are a few critical reasons why it may make sense to get life insurance in your 40’s.

You want to plan for your children’s future

Whether they’re newborns or heading to college, ensuring that as your kids grow they’re financially protected is a major reason many 40-somethings choose to purchase life insurance. Not only are they one of your largest responsibilities, but child expenses range from the long-term, like educational planning, to monthly, like childcare, school supplies, groceries and clothing. By having a life insurance policy, you’re able to help your children as well as your significant other with costs if something were to happen to you.

Because term life policies offer a range of coverage amounts and term lengths, they’re typically the preferred option; especially for growing families or ones who want to help their children transition into adulthood. You can choose the amount of coverage you need based on the ages of your children, tailoring the term so it provides coverage until your kids are through college, for example.

You can tailor the policy, too, to cover your current and future kids, fill any financial gaps from smaller employer plans, and cover a set amount of time of 10 to 30 years. If you were to pass away during your term, you’d have the peace of mind of knowing your children would be protected and provided for, as well as have a financial safety net to start their adult life or pay for large events like college or weddings.

You don’t want to pass down debt

A recent Experian study showed that those aged 40 to 55 (Gen X) are likely to carry the most debt of any age group at about $136,000, which is $40,000 more than the second highest group, Baby Boomers. Gen Xers also carry an average mortgage balance of $240,000, $8,000 in credit card debt, and $40,000 in student loan debt.

Do you want to pass on these expenses to your loved ones if you were to pass away? Would your family be able to handle payments without any financial assistance? If your answers are no, getting life insurance in your 40’s might be a good plan.

If you’ve already completed many debt-heavy activities like buying a home and financing your life during this decade, it’s likely easier to review your past expenses and future ones, like college or retirement, with a clear sightline. That means choosing a life insurance policy is easier since you can fit it to your exact needs and debts.

Term life insurance, again, likely fits the bill here. You could customize the policy around your financial obligations, providing coverage until your mortgage is paid off, or when you’re scheduled to pay off your debt. You can alleviate the responsibility from your family, and gain the peace of mind that if you were to pass away, your loved ones wouldn’t be left with excess expenditures during an already difficult time.

You want your spouse to have a safety net

Although your home may have two breadwinners, losing you unexpectedly could negatively impact your spouse’s financial stability or current living situation. Factoring in mortgages, monthly bills, child expenses, health costs, and their retirement, if you don’t have any or enough financial coverage, your significant other could have a monetary burden put on their shoulders.

Helping them lead a similar quality of life, and ensuring they have enough funds are a couple reasons why purchasing life insurance in your 40s makes sense. Especially if your spouse is a stay-at-home parent, knowing your family can be protected with a financial plan if your income were to be lost can be comforting.

You want your elderly family members cared for

Another reason those in their 40’s get life insurance is they’re caring for aging family members. When your elderly loved ones rely on you, your passing would raise many questions and uncertainties. How will they maintain their standard of care? Will they be able to afford assisted living? What would their options be if they lost your supportive income?

Whether it’s paying for medical bills or living costs, having a life insurance policy could help you cover their care. You can create a plan that fits the protection you need, anywhere from 10 to 30 years, and ensure that your family member could continue to be financially supported in the event of your untimely death.

A life insurance policy can help prevent you from being one of the 40 percent of Americans who lack confidence that they’ll be able to leave behind a strong financial legacy for their loved ones. It may seem like buying life insurance in your 40’s is an off-beat time, but it’s one of the most critical, financially-demanding decades to protect. Being in the middle of childcare and eldercare, college, and retirement, means there’s plenty of expenses you want protected for your family who relies on you.

Ethos offers term policies for 10 to 30 years, with coverage options from $100,000 up to $1.5 million. Here’s a helpful guide to see how much coverage might be right for you. If you already have life insurance, have you checked recently to confirm that it’s enough coverage for your family? Knowing you’ve got proper, affordable, and straightforward life insurance to support the financial obligations many in their 40’s have can be comforting and help you feel confident you’ve secured your financial legacy. Want to take the next step? Start by getting your quote today.