Life Insurance

Top reasons to get life insurance in your 40s

Oct 19, 2023
father and sun playing on the beach
As you enter your 40s, you may find your financial landscape becoming more complex. Your responsibilities might have increased as your household has grown, and you’re in the prime of your career. You’ve possibly entered into the “sandwich generation” phase of life where you might be caring for young children and supporting older parents at the same time. And, the retirement years may no longer seem so far off.

Amidst these changes, life insurance can help serve as a reliable safety net, safeguarding your loved ones and the assets that you’re working so hard everyday to build. If you're in your 40s and have not yet considered getting a life insurance policy, here are some compelling reasons why you should.

Your family relies on your financial support

One of the primary benefits of life insurance is helping to ensure that if something were to happen to you, your dependents could be financially safe. If you have a spouse, children, or others who rely on your income, life insurance can provide peace of mind. This is especially relevant in your 40s, a time when family expenses like mortgage payments, children's education costs, and day-to-day living expenses can be at its highest.

You don’t want to leave behind a debt burden

In your 40s, you may still be juggling various debts such as mortgages, personal loans, or credit card bills. The last thing you want is for your partner to be left responsible to pay these significant balances. 

According to a study by Business Insider using data from the Federal Reserve Bank of New York's Household Debt and Credit report, Americans carry the most debt when they’re in their 40s. From age 40 - 49, the study found that the average total debt load was just over $105,000. 

A life insurance policy – specifically the death benefit – can help to ensure these debts do not become a burden to your loved ones if you're no longer there to pay them off. 

You’re the breadwinner

If you’re the top earner in the household – or even if your income provides a significant contribution – that’s a good reason to consider life insurance. If you’re in your 40s, the likelihood is that you’ve progressed in your career and your earnings have increased. As such, this often means that your lifestyle and spending have adjusted accordingly. If something were to happen to you, life insurance could assist in replacing your income, helping your family continue the lifestyle they are used to without the financial strain of losing your wages.

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You’re in retirement prep mode

You’ve probably realized when you’re in your 40s that somehow, 20 years can go by in a flash. Before you know it, you’ll be ready to retire. Hopefully, you’ve already been funding various retirement accounts, but if you’re looking for another tool to help, some types of life insurance can assist with retirement planning. If you choose whole life insurance, for example, the policy accumulates cash value over time that you can borrow against or withdraw from later in life. While not a substitute for a dedicated retirement plan, it can be an additional tool to bolster your retirement readiness.

You want to lock in lower premiums

Life insurance premiums generally increase with age because insurance companies set rates based on the risk of you passing away. So the older and less healthy you become, the greater their risk of having to pay out a policy, and that cost is passed on to you. While that’s true, obtaining a policy in your 40s can still secure comparatively lower premiums than if you wait until your 50s or 60s. Especially if you are in good health, the rise in premiums might not be as steep as you think. Purchasing life insurance coverage at a younger age can lock in lower premiums.

Once you hit 50, though, you may find that premiums jump up a bit, so ideally, it’s best to look into life insurance sooner rather than later. 

You want to protect your legacy 

Life insurance can play a vital role in estate planning if you will be leaving assets to your loved ones. The death benefit from a life insurance policy can help cover estate taxes, preventing your heirs from having to liquidate assets to pay these taxes. In other words, if you have a home you want to leave your kids or grandkids, but the maintenance and tax cost would be too much for them, these funds can help them keep it. This is just one more way that a life insurance policy can help you leave a financial legacy for your children or grandchildren.

Don’t let another decade go by

If you’ve put off getting life insurance and you’re approaching (or are in) your 40s, set aside some time to explore your options. The older you get, the more crucial it might become to add this component to your financial plans.  

Life insurance helps to ensure that your loved ones could be financially secure and your debts may be covered if the unexpected happens. Furthermore, depending on the type of insurance, there may be additional benefits available to you and your loved ones. Consult with a financial advisor or insurance expert to help determine the best policy for your specific needs and circumstances.

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