Fact CheckedWhat’s the Best Life Insurance for 40 and over? Well, now, this is a terrific question.
The 40s are an exciting time personally and from a life insurance perspective.
Maybe you have kids nearing the end of high school – possibly even entering college…
OR maybe you’re just planning for your first child. Families these days have so many variations.
So, let’s explore the ins and outs of life insurance in your 40s and see how you can get the best possible coverage for the lowest rates.
The Best Life Insurance for 40 and Over
Life Insurance Rates Ages 40 – 49
As I mentioned above (and in all of my articles), the older you are, the more risk life insurers take to cover you. Hey, that’s not to say you aren’t in great shape.
You may even qualify for premium rates. People are taking better care of themselves, and the ’40s aren’t what they used to be.
Frankly, my friends, it’s all just a numbers game. No matter how healthy and active you are, we only have a few years to enjoy life on this planet.
If you think about it in terms of summers, the reality truly hits home…
…and no, I am not trying to be a downer. It’s just a fact that all of us have to consider. Especially if we have dependents and debt.
Rates Start to Take Off in Your 40’s
You need to note this: Life insurance is a finite product. This means that certain terms are unavailable on specific birthdays.
For example, a 30-year term ceases to be available on your 55th birthday. In fact, with some carriers, like Ivari, you’re only eligible for a 30-year term policy if you’re 50 or younger.
Some life insurance companies are more lenient than others regarding age. In other words, they cover you later in life for less money.
However, it would be best if you still planned to get affordable coverage to achieve your goals. Let’s examine coverage over the years and how it starts to increase in cost.
1. Remember Life Insurance Birthdays Are Important
- Life Insurance Ages 40, 41, 42: Life insurance for those with standard non-smoking rates. While prices rise, they are still in the same ballpark as in your 30s.
- Life Insurance Age 43: You can feel the change in the underwriter’s attitude about your longevity. Your payments may go up more than $30.00 monthly, more than if you apply at 40. Over the life of a 20-year policy, that’s more than $7,000.
- Life Insurance Age 44, 45, 46, 47, 48 & 49: Rates are growing faster!
- Life Insurance at Age 50: This is a big milestone! You now pay substantially more for coverage. Please check out my article about life insurance in your 50s.
2. The Older You Get, the More You Pay
Do you see what is happening? The cost of term life insurance is snowballing because life insurance companies now view you as a greater risk.
If you’re looking for affordable rates, the sooner you contact me, the better. The good news is that there’s still hope. You can find the best coverage at competitive rates with the right independent life insurance agent.
3. Getting Declined is Rare
Approximately 80% of consumers who apply for life insurance in Canada are approved at a standard health rate or better. Of that 80%, approximately 40% are approved at preferred or preferred plus rates.
Who decides what rating you ultimately receive? The life insurance company does. So, any agent who promises you lower rates isn’t able to do so.
That doesn’t mean you should give up trying to get the best possible rating! Many of my clients receive Preferred and even Preferred Plus ratings, meaning they pay even less for their coverage.
…on average, men spend 40% more! It’s a simple matter of statistics. For the most part, women live longer than men.
“In fact, the difference in lifespan has remained stable even throughout monumental shifts in society. Consider Sweden, which offers the most reliable historic records. In 1800, life expectancy at birth was 33 years for women and 31 years for men; today it is 83.5 years and 79.5 years, respectively. In both cases, women live about 5% longer than men.”
4. To Get the Best Life Insurance for 40 and Over: Your Health Matters
…and the healthier you are, the more you save. But please, whatever you do, don’t let health concerns allow you to procrastinate.
Protection is the priority, especially if you have dependents. The truth is you are likely healthier than you think. Most people dread their physical exams.
Do you want to hear some positive news?
They are typically uneventful, and most people pass with flying colors. The key to obtaining affordable life insurance is management.
Even if you have high blood pressure or cholesterol, if it’s under control and you have a history of treatment, the underwriters don’t view you as high risk.
… and don’t forget…if you are very sick, there are options. No medical life insurance products have come a long way!
This is why you need a great independent agent. We know the ins and outs of underwriting for the best companies in Canada. Even if you are a high-risk applicant, we go the extra mile to find the right fit.
One Caveat: Smoking!
…things get a little dicier when you smoke. This seriously impacts the premiums you pay. On the bright side, you are in control of this situation.
Did you know after 12 months of NOT smoking, you’re considered a non-smoker by most life insurance companies? Yep.
My advice? If you’re a smoker, don’t put off applying for life insurance. Call Policy Architects, and we will find the best fit. Then embark on a smoking cessation program – and be sure to inform your doctor.
Your medical practitioner must follow your progress and document it. Once you hit the one-year mark, we can reapply for a better rating.
Selecting the Right Company for YOU
One of the main points I emphasize is that not all life insurance companies are created equal.
This is true when it comes to their financial stability AND their underwriting practices.
It makes sense. Many companies take on a niche to gain a market edge, which is also true for the life insurance industry.
Each person has unique circumstances regarding health. This is why it is so important to find a knowledgeable independent agent familiar with this ever-changing landscape.
When you call Policy Architects, if there is a question about your situation, we contact the underwriters at various companies to see how you may fare BEFORE applying.
We go the extra mile, and it pays off in spades!
Who Needs Life Insurance at 40 Anyway?
As I mentioned above, the world is ever-changing. So are people’s circumstances.
Clients in their 40s are in different situations. I fell out of the “norm” because I had my son at 45, which is a lot older than a lot of my peers.
So, let’s look at situations that require life insurance in your 40s now!
1. Income Replacement & Family
Many people think of income replacement when considering life insurance to cover loved ones in case of an early demise. Just think about it—when someone dies, their ability to earn money (their paycheque) dies with them.
This is devastating to families that have dependents, a mortgage, and debt—leaving their family in a terrible financial jam.
I got my first policy when my son was born in my mid-40s because I started my family late…
… but other families are sending their children to college and university at this point and may not need the same coverage.
2. Divorce
This is another situation that requires life insurance forethought, and I think it surprises a lot of people.
If you have children with someone you’re no longer with, they may request some financial protection just in case you die unexpectedly.
Even if you don’t provide financial support, time is money. If you were to pass away, what new costs would your ex have to take on as a result?
All of this is taken into consideration when you separate. A life insurance policy gives you and your ex-spouse some confidence that neither of you will be left with financial problems as a result of sudden death.
3. Entrepreneurialism
Do you own a business? Sudden death could be the end of it unless you plan – especially if you’re a key person.
Life insurance may be the perfect tool to protect the integrity of your company, partners, employees, or even your family’s interests!
There are many ways life insurance can be used in business, and in fact, this deserves a post on its own, which I’m writing.
Life insurance can also help you grow your business. Let’s say it’s a well-established company, but you have a vision for growth.
This is awesome, but you need a loan to execute your plans. In this case, a bank may require a life insurance policy if you pass away unexpectedly to cover the loan. This is another excellent tool for you to use.
4. Final Expense & Estate Planning
There’s no denying it. Middle age is setting in, and many of us are considering our estate planning and what we want to happen when we leave the earth.
Sure, it’s not one of those topics we want to discuss with our friends over a casual dinner, but it needs to be done.
Especially if you have dependents or a partner who needs your financial input.
Whether you’re concerned about estate taxes when you die or a simple burial, a knowledgeable independent agent can help you reach your goals.
Your unique circumstances dictate how you approach this coverage. Estate planning and final expenses usually involve permanent coverage, so obtaining advice from someone who understands this type of insurance is essential. It’s complicated, and you could be led astray without professional advice.
5. Children With Disabilities
If you have a child or children who cannot care for themselves, planning is essential. If you pass away unexpectedly without a plan, vulnerable dependents are left without a safety net.
There are many ways to avoid this. Trusts are a handy tool; when paired with life insurance coverage, they can help you cover this situation.
Planning for children with special needs is a complicated process that must be done correctly. I highly suggest speaking to a lawyer or an excellent financial planner before contacting Policy Architects about the appropriate coverage.
If you don’t get great advice, you may not hit all of your goals—and there is no space to make mistakes if you have a child who is utterly dependent on you.
Best Type of Life Insurance for a 40 Year Old & Up
Term or Permanent Coverage?
Life insurance comes in two primary forms:
- Term: This is the most traditional form of coverage. You determine how much money is required to protect your family, select the period you’re most vulnerable (the term), and apply to an insurer for a policy. Traditional term policies require a medical exam – those findings are sent to an underwriter who issues a rating that targets your premiums.
- Permanent: This type of policy covers you until the day you die, so if that’s your goal, this is the solution for you. The process is similar to term (unless you are considering standard or guaranteed issues), but it’s much more expensive because you WILL receive a payout. There is also typically a cash value accumulation feature attached, although this varies by product.
What Works for YOU?
For most people, term insurance is a great and most affordable choice—especially if you need income replacement. But as you age, this starts to change. Term insurance gets far more costly, and permanent insurance becomes more of a contender. It works a charm for final expenses, businesses, and children with disabilities.
However, speaking to a great independent life insurance agent is essential to ensure you get solid advice before you sign on the dotted line.
How Much Coverage Does a 40-Something Need?
Being uninsured is the worst possible situation, but being underinsured doesn’t fall far behind.
People vastly underestimate how much money they need to maintain their lifestyle. I think it has a lot to do with being busy. Many of us have to hustle to make ends meet, and if we’re in partnerships, there are chances there is a dual income involved.
This is not always the case, but it is increasingly common.
This doesn’t leave much time to ponder “what if?” So when people come to see me, they often think about these topics in great detail for the first time.
It’s easy to overlook multiple costs and forget about obligations.
10x’ing Your Salary
Most life insurance agents suggest purchasing ten times one’s salary for adequate coverage to help people figure out what they need to keep their families comfortable.
While this may seem like a lot of money at first glance, it isn’t that much when you do the calculations.
My clients Sherry and Glenn are in their early ’40s. They have a 5-year-old and a 10-year-old, so they have many financial obligations to look forward to.
They are a dual-income family, but Glenn makes $75K annually, and Sherry brings in $40K because she only works part-time. They have a costly mortgage ($500K) because they live in Vancouver and have lots of debt.
To protect their kids, they think $500K of coverage for 30 years will suffice.
OUCH! Hold ‘Yer Horses
This is NOT enough coverage.
Ten times their salary is ideal if they truly want to keep their family comfortable. So, to protect Sherry, Joe should take out at least $750K of coverage.
But even that may not be enough. If Joe dies, will Sherry continue working part-time or dedicate 100% of her time to her family because of the loss? My guess is she will quit. This means you have to add her salary to this equation.
This brings them to $1,150,000.00 of coverage, which may be even more because they live in the most expensive city in Canada.
As you can see, there are many considerations, and this small example only reveals a little bit of what an independent agent considers when they review your case.
Get the Best Life Insurance 40 and Over: Call Policy Architects Today!
If you are looking for the best life insurance 40 and over, working with an independent life insurance agency like Policy Architects can help you get the most affordable policy.
There is no point in putting it off. The longer you wait, the more it costs, and if you wait too long, your options are sometimes seriously curtailed.
Work with the independent life insurance agents at Policy Architects, and we will ensure that you find the most comprehensive policy for the least amount of money.
NOW!
