Fact CheckedAre you scanning the internet for information about 30 year term life insurance? If so, you’re in the right place! Life insurance is my business. So, what the heck is a term?
One of the biggest obstacles I encountered when shopping for life insurance was that the web was full of information that assumed much insider knowledge. Agents know all the terminology, but what about people considering buying life insurance for the first time?
They’re complete novices and have no reason to know the jargon we use daily.
So, I am writing articles that make life insurance as easy and palatable as possible.
A term is the period you select to be covered. So, when I say you’re looking for a 30-year term, you’ll be covered for 30 years. Likewise, a 10-year term will cover you for 10 years, and a 20-year term will protect you for 20 years.
But I’d like to share more, including the cost of 30-year term life insurance!
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 deals with people planning 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 those long-term debt obligations on, you’re playing with fire if you don’t 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!
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.
30 Year Term Life Insurance Rates
Now that you know WHY you may need a longer-term plan, the next question on the agenda is: What is the average cost of 30-year term life insurance?
Medical Conditions
Age is the biggest factor when it comes to cost, but health also significantly affects how much you pay for life insurance. However, it would be best if you had a fundamental understanding of underwriting to evaluate this correctly.
First of all, most people underestimate their health. I think people’s fear of being sick keeps them in constant vigilance.
Another issue I see frequently is that clients overestimate the impact of well-controlled conditions like high blood pressure and elevated cholesterol.
When controlled, these circumstances don’t have as much punch as you may have first thought. I wrote a guide about High-Risk Life Insurance; click here.
I always like to include basic rates in my life insurance company reviews. They give you an idea of what to expect. Just remember, RBC may or may not be the company that works best for your particular situation.
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| Age | $500,000.00 | $1,000,000.00 |
| 30 Year Old Male | $45.41 | $63.54 |
| 30 Year Old Female | $34.83 | $75.4 |
| 35 Year Old Male | $54.77 | $103.95 |
| 35 Year Old Female | $42.80 | $75.42 |
| 40 Year Old Male | $87.75 | $168.48 |
| 40 Year Old Female | $63.50 | $119.88 |
| 45 Year Old Male | 149.04 | $277.02 |
| 45 Year Old Female | $102.78 | $197.64 |
| 50 Year Old Male | $138.92 | $239.31 |
| 50 Year Old Female | $97.02 | $165.51 |
| 55 Year Old Male | $223.58 | $731.07 |
| 55 Year Old Female | $261.54 | $504.90 |
| 60 Year Old Male | n/a | n/a |
| 60 Year Old Female | n/a | n/a |
*Quotes above are monthly rates for RBC 30-Year Level Term life insurance, Standard Health Class, and non-smoker. Your rates may differ depending on your unique circumstances. September 2024.
*NOTE: If you’re 56 or above, you’re not eligible for RBC’s Term 30 product.
Choice Of Life Insurance Company
I repeat this mantra in every single article I write. Not all life insurance companies are created equal.
They each specialize in a niche, which can sometimes make the difference between being rated standard or preferred.
Knowing the nuances of the underwriting guidelines helps you choose the right company for your particular needs. This is why you should never use a captive agent. They won’t be able to give you an overview of all the insurers you can choose from.
Some carriers have unique products in addition to underwriting nuances.
Why it’s Essential to use an Independent Agent
…and last but not least. If you are looking for 30-year level term life insurance, seek the advice of an independent life insurance agent.
As I mentioned above, they will do a quick needs analysis, discuss your personal goals, and review all the possible insurer choices to find the best fit. I find that people underestimate their needs more often than not.
For example, I have a client who thinks she wants a $500,000 20-year term life insurance policy. She has a young family and is primarily concerned about her mortgage.
After we review her circumstances, it becomes clear that she has debt and is looking at a raise in the next few years. She expects her salary to double in a reasonably short period.
My client also wants more children. The more we discuss the future, the more she realizes that she probably needs a minimum of $1 Million of coverage. The personal touch made all the difference, and I will contact her to ensure that her life insurance needs will be met in the coming years.
30 Year Term Life Insurance & Why You Should Call Policy Architects
Life insurance should never be considered a one-off purchase that you can set and forget. The truth is that your life circumstances can change dramatically, so logically, your insurance needs can change as well.
A 30-year life insurance policy may be the perfect solution to protect you and your family, or it may not be. The key to nailing down the right coverage is a quick needs analysis.
What may seem like the best solution may be ill-fitting ten years later.
That’s why you should contact policy architects today. We can help you find the most comprehensive coverage at the best price. Hit the “free quote” button below.
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