30 Year Term Life Insurance & Why You Need It NOW

5 Reasons You Should Consider 30 Year Term Life Insurance

You’re not alone if you’re interested in 30-year term life insurance. It’s a popular product for many reasons. For example, we live longer than ever, retire later, and take on more roles than our parents and grandparents did.

1. You’re Young, Healthy, Have a Family & Debt

A big part of my business involves helping people plan for the future.

If you have a child or children, life insurance is a no-brainer: You need it whether you have a mortgage or not. If you tack on those long-term debt obligations, you’re playing with fire unless you have protection.

The good news? You’re young and healthy, so life insurance coverage is super cheap!

Do you know why life insurance is so inexpensive during this period?

Because underwriting is all about risk, the older you are, the closer you are to death, and life insurance companies pass this risk on to you by increasing your cost of insurance as you age.

That’s why it’s important to apply for life insurance when you’re younger and healthier.

Remember, if you have a family depending on you financially and you die unexpectedly, your paycheque dies with you. A 30 year term life insurance policy is all about protecting your loved ones long-term.

The goal is to live well through to the end of your term. But if God forbid you don’t, you know your family won’t face financial devastation.

No One Thinks They’re Going to be the One That Dies.

Both my wife and I know people who have young families that sustained a tragic death. Unfortunately, some of these individuals did NOT have life insurance coverage.

Having an individual life insurance policy will give you peace of mind, as you know your loved ones are protected.

2. You Have a 30-year Mortgage

Mortgages are not getting smaller and interest rates don’t seem to be getting any lower. All across Canada, the housing market is on fire! If you want to buy a house, there’s a straightforward fact you will have to accept.

You will owe the bank a boatload of cash unless you are independently wealthy, which is not most of us.

So, let’s say you’re living with a spouse.

You don’t have kids, but you bought a fantastic place in Vancouver. Your mortgage could easily be more than $800,000 or $1 Million.

Even if you don’t have a lot of debt, this is a serious sum. If you want your spouse or partner to continue to live the life they’re accustomed to, individual life insurance is the most effective and affordable way to protect your home.

Protecting Your Mortgage is Really All About Protecting Your Income

Many financial institutions market mortgage life insurance to new home buyers. However, the term “mortgage protection” is a misnomer.

It’s easy to get distracted by the concept of protecting your mortgage. However, it would be best to focus on safeguarding the income you need to pay your mortgage in the first place. This is the most important thing! That’s why it’s best to think of “protecting your mortgage” as “protecting your income.”

Like many Canadians today, your mortgage may be amortized over 30 years. That makes a 30-year life insurance policy ideal for protecting you and your spouse.

If you’re not here tomorrow, how much of your income does your spouse need to carry on paying the mortgage and any other living expenses?

How long will they need that income? These are the two main questions you should ask yourself when deciding the amount and length of protection (or term).

For an in-depth post about using term life insurance to protect your mortgage, click here.

3. Your Millennials Are Never Gonna Leave!

“According to the latest US census data, one-third of adults ages 18 to 34 live at home with their parents” Help – My Millenial Kid Won’t Move Out!Jane Ridley, New York Post

Children are living with their parents longer than they did in the past.

Secondary education and the fact that life is expensive are a few reasons the kiddos may opt to live with you well into their 20s and 30s. But no matter how you look at it, these sorts of circumstances make a significant impact on your obligations.

That 20-year term life insurance policy that looked like it would cover your family in times of need is inadequate.

This is especially true if you are footing the bill for college or university—or even co-signing for a loan for further education. You’re in Term 30 territory now, baby!

So, if you think your kids may depend on you longer than anticipated, 30-year-level term life insurance comes in handy.

4. You Have a Business

Okay, maybe you have your family’s needs taken care of! Good for you. You’re one of those prepared people, and I commend you.

This winter, you’re celebrating your 40th birthday, and a new career is on the horizon. You and your new business partner rent a space and have taken on much responsibility and debt. Man, the numbers sure add up.

So, what happens to your fledgling business if you pass away suddenly? You’re an important part of it, and it will likely bottom out.

A life insurance policy will protect your business from an untimely demise. Both you and your partner should have a policy that allows the company to continue.

A 30-year term policy may make sense as many people are working into their 70s. This is another reason to speak to an independent life insurance agent. We can provide information to help you make the most educated decision.

5. You’re Younger & Want Longer Insurability at a Guaranteed Cost

Even if you stay healthy, your insurance rates will increase as you age. For example, a 40-year-old will pay significantly more for life insurance than a 25-year-old.

Life insurance is extremely affordable if you’re in your late 20s or early 30s. A 30-year term life insurance policy will lock in lower rates well into your 60s.

If you get a lesser term initially and then decide to replace it with another term policy later, you must undergo an insurance medical exam again. Not to mention, even if you’re healthy, your rates will increase substantially based on your age alone.

So, buying a $1,000,000 30-year term when you’re young is a smart idea. Did you know that once your policy is in force, you are guaranteed insurability for life?

Convertibility Option

All term coverage, including 30-year term life insurance, comes with a convertibility option.

This means you can exchange all or a portion of your term insurance into permanent whole-life coverage without undergoing medical tests or answering health questions. All you have to do is fill out a form.

With most carriers, you have to exercise this option by age 71.

This is valuable if you develop a serious health condition like cancer or heart disease, etc. It can happen. One of the added perks of a 30-year term life insurance policy is that it increases your conversion window. Read more about converting term insurance here.