Congrats, you’re in your forties! It’s all downhill from here!
Kidding, of course. You still have a long life ahead of you. That’s why life insurance is still something to look into even when you’re in your forties.
Calculating life insurance rates by age is tricky, and they get more expensive the older you are. You’ll have to take some special considerations into account in order to get the best rates. But even though it can be more expensive to buy life insurance in your forties than in years past, it's still possible to get an affordable policy!
Here’s what you should keep in mind when you’re looking for life insurance in your forties.
Honestly, you should have probably bought life insurance when you were in your twenties or thirties. That’s when you begin having things you need to protect: a spouse, a kid, a home, and so on.
The real reason, though, is because it’s just so much cheaper! Your life insurance premiums will be locked in when you get a policy, and because people are typically healthier when they’re younger, they can get lower rates that will last for the entire term of the policy.
But it’s never too late! Life insurance premiums increase by an average of 4.5-9% every year, so the sooner you get insurance, the more money you’ll save.
Consider your costs
As you get older, you have more responsibilities, and your forties are a time when big expenses are just around the bend. How would your family pay for them if you were gone?
We all know that college is expensive. If you have kids, they’re probably less than ten years away from stepping onto campus. Considering the skyrocketing costs of higher education, you’ve likely been saving with a 529 plan for years, but obviously the closer your kid gets to college the less time you have to contribute money to a fund and get compounding interest. Life insurance can help pay for college in the event of your death, so your kids won’t have to worry about the primary breadwinner not being around to build that college fund.
Of course, it’s not all about the children. As you age, you and your spouse get closer to retirement. There are a lot of options for saving for your golden years, from 401(k)s to IRAs, but with rising cost of living more and more people are having to work longer and save more than ever. If you died today, would your spouse have enough money to live on? Would he or she be able to keep contributing to retirement investment vehicles so they had enough money to live comfortably in the twenty or thirty years of retirement?
When you’re looking at life insurance policies, you need a policy that protects your costs – not just your current costs, but the things that are years, maybe even decades, down the line.
Only get what you need
At the same time, some of your expenses will begin to dwindle the older you get.
Take your mortgage, for example. It’s a huge expense, but by the time you’re in your forties you’ve probably paid off a good chunk of it – maybe as much as half. That means, while there will still be mortgage payments every month, there won’t be as many left as there was when you were in your twenties.
And even though college is a big expense, you won’t be paying the cost of raising kids for much longer. Children can cost almost $250,000 to raise from birth until they’re 18. That’s nearly $1,400 a year. Discounting those expenses means a big change to your budget.
The point of life insurance is to protect your family by covering your expenses. By having an idea of what will still need to be paid for five, ten, or twenty years down the line will help you figure out how long of a term your policy should be, and how large the death benefit should be. These determine the size of your policy so judging them correctly will have a huge impact on what your rates will be.
Be aware of your health
It’s not a surprise that we all get a little less healthy as we age. By knowing more about your body, though, you’ll have a better understanding of how an insurer will rate you.
Life insurance premiums are determined by your classification – essentially how risky you are to insure. This is determined by a number of things, but chief among them is your current health. When you apply for a life insurance policy you’ll need to take a paramedical exam, at which point the insurer will see what health issues currently or potentially afflict you.
When you’re into your forties, some health issues start creeping up. Heart disease, diabetes, and cancer are the three biggest health hurdles that affect people as we age. Before you apply, you should know what’s going on with your body. Diabetes will increase your life insurance rates, and while it’s true that you can’t cure diabetes overnight, you can get medication that helps to control it. A life insurer will take into account the management of any health issues when setting your rate, so while yours may be higher, it won’t be as high as someone who is letting, for instance, their high cholesterol go unchecked.
Proper exercise, diet, and medicine can go a long way in helping prevent common issues like high blood pressure or cholesterol. And getting regular physicals and other tests, like colonoscopies and pap smears, can help prevent medical issues, catch them early, or even just give you a baseline for your health so you know what you need to improve to get the lowest life insurance rates.
There’s never a deadline for protecting your family, so life insurance in your forties is still a great idea. When you’re looking to get the best rates, you just need to be aware of things that have changed since you were in your twenties: the length and amount of coverage, not to mention your own health, are a lot different than they were ten or fifteen years ago. Take these things into account and you’ll be well on your way to an affordable life insurance policy.