What Is 40-Year Term Life Insurance & Should You Get It?

A 40-year term life insurance policy is the longest term life insurance option available. This extended term length caters to specific financial planning needs but may only be suitable for some. It is best for people with long-term commitments — a 40-year term provides extended security. Other term lengths may be more appropriate if you have shorter-term financial goals or are nearing retirement.

Currently, only Protective Life Insurance and Banner Life (a subsidiary of Legal & General) provide 40-year life insurance policies.

Term life insurance is a type of life insurance policy providing coverage for a specific period or "term." Beneficiaries receive the death benefit if the policyholder passes away within this term. While terms typically range from 10 to 30 years, 40-year term life insurance represents the longest term life insurance policy available.

Life insurance with a 40-year term guarantees a death benefit if the insured passes away within 40 years, making it a reliable option for long-term financial planning. Due to the extended coverage duration, the premiums for this type of policy are typically higher than those for shorter terms. However, locking in a rate for 40 years can provide cost stability in an otherwise fluctuating market.

Choosing a 40-year life insurance policy requires careful consideration. Assessing whether the extended coverage aligns with your financial goals and life stage is essential. For those who benefit from such extensive coverage, maintaining term life insurance for 40 years is a financial safeguard for beneficiaries over a considerable period. Understanding these aspects is critical in determining whether this policy suits your needs and offers the best value among top term insurance plans.

Term length is among the significant factors affecting the cost of life insurance. Generally, the longer the policy term, the higher the premium. This is because longer terms, such as a 40-year life insurance policy, encompass a more significant risk period for the insurer. As a result, 40-year term life insurance rates are usually higher than costs for shorter terms like 10, 20 or 30 years. The increased premiums reflect the extended coverage duration and the higher probability of an insurer having to pay out the policy over a longer time frame.

When choosing between 40-year term life insurance and permanent life insurance, it’s important to understand the differences and how they align with your long-term financial goals. A 40-year term life insurance policy, as the longest term life insurance option available, offers coverage for a specific period, ideal if you who need protection for extensive but finite commitments. Once the term expires, so does the coverage, unless it is renewed or converted.

By contrast, permanent life insurance, which includes universal life and whole life insurance, offers a lifetime of coverage and a savings component that can grow over time. This makes it one of the largest life insurance policies in terms of potential financial value and flexibility. Permanent insurance is typically more expensive than term insurance due to its lifelong coverage and investment benefits.

Choosing between 40-year term life insurance and permanent life insurance often depends on factors such as age, financial needs and desire for an investment component. A 40-year term life insurance policy provides a more affordable and straightforward protection option suitable for specific long-term planning needs, while permanent insurance offers enduring security and potential wealth accumulation.

Understanding the advantages and disadvantages of 40-year term life insurance is important for making an informed decision, helping you weigh whether this policy fits your needs.

ADVANTAGES

• Extended Coverage: A 40-year life insurance policy ensures long-term financial protection, ideal for securing family and business obligations over decades.
• Fixed Premiums: Premiums for this type of policy generally stay consistent throughout the term.
• Estate Planning: A 40-year life insurance policy can be a strategic tool for long-term estate planning, ensuring asset protection.
• Debt Security: A 40-year term life insurance policy is ideal for covering long-term debts like mortgages.

DISADVANTAGES

• Higher Cost: The 40-year term life insurance rates are generally higher than the costs of policies with shorter terms.
• Inflexibility: A 40-year term life insurance policy is less adaptable to changing life circumstances.
• Overinsurance Risk: There's a potential risk of paying for unnecessary prolonged coverage.
• Limited Provider Options: Only a few insurers offer life insurance with a 40-year term.

Carefully consider the policy length you need, especially given the vast difference in average cost between term lengths. You’ll want to evaluate your circumstances to determine whether 40-year term insurance is the best option for you.

When determining the term length you’d like to take on, it’s a good idea to anticipate your future financial commitments, like your children’s educational expenses. A 40-year term life insurance policy is not for everyone. Although 10- and 20-year term lengths are more popular than lengthier terms, these may not be the best term life insurance policies if you anticipate long-term expenses.

While 40-year term life insurance offers long-term security, it may only suit some people's unique financial situation.

Protective Life and Banner Life (a subsidiary of Legal and General) are the only companies that offer 40-year term insurance policies. These two companies only recently made this policy length available to the market. These policies are among the largest life insurance policies available in terms of duration — the longest-term life insurance that most companies offer is 30 years.

When a 40-year term life insurance policy ends, the insured must decide the best course of action based on their current life situation and financial security. Here are some viable options:

• Purchase a New Policy: Individuals who still need life insurance coverage can purchase a new policy. Keep in mind that premiums will likely be higher due to increased age.
• Renew Your Plan: Some policies may offer the option to renew at the end of the 40-year term. This choice can provide continued coverage without requiring a medical exam, but premiums will be recalculated based on the insured's current age, which can significantly increase costs.
• Convert to a Permanent Policy: If the option is available, converting your term life policy to a permanent plan (like whole or universal life) provides ongoing coverage without further medical exams. This is a beneficial transition, though it comes with higher premiums due to the permanent nature of the coverage. This conversion is typically possible through a term conversion rider included in the policy, which allows policyholders to switch their coverage type within a specified period without proving insurability.

By following these steps, you can make an informed decision and choose among the best term life insurance policies that meet your needs for the next 40 years.

A 40-year term life insurance is relatively new and not available through most insurance providers. Below are common questions about these policies.