If you're like many, your loved ones' financial safety is a huge priority. Especially if you're a parent or homeowner. So, what are your options?
In this guide, we'll explain why life insurance can be worth buying in your 40s as well as the policies available.
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Is it worth getting life insurance at 40?
No matter what stage you're at in life, having life cover is a smart way to protect your family and/or loved ones. Your 40s are a time when many people have responsibilities such as mortgages and children to support.
Life insurance provides your family with a cash payment if you die. This money can help them during a tough time.
Having life insurance in your 40s can provide a range of benefits if you died suddenly, such as:
Providing financial support for your family to maintain their standard of living
Covering the costs of outstanding debts, including mortgages and loans
Providing a safety net for any end-of-life expenses, such as funeral costs, which can be costly
Offering peace of mind knowing that your family/loved ones will be taken care of in your absence
Acting as an inheritance for your children
What types of life insurance are available for over 40s?
Many policies could provide adequate protection for your family/loved ones. Life insurance, in particular, comes in two main forms - whole and term. While both sound similar, they provide different benefits, suited to different needs.
Whole Life Insurance
Whole life insurance, as the name suggests, provides cover for your entire life, as long as you continue to pay your monthly premiums.
The benefits of this type of policy go beyond just lifelong cover; it also brings reassurance that your protection will remain in place.
One benefit is that you won't have to worry about increasing costs as you age or if your health changes, thanks to the policy's fixed premiums. However, premiums can be higher since cover is permanent.
It could be a great option if you want long-term protection — like during retirement — or to leave a legacy for your loved ones. You can also choose to buy a joint policy if you and your partner or spouse share financial responsibilities.
Please note: The insurance products offered by Cavendish Online have no cash-in value at any time. If you stop paying your premiums your cover will stop, your policy will end, and you will receive no benefit. If you have not claimed before the end of your chosen policy term, the policy will end, and no benefit will be paid.
Term Life Insurance
This type of insurance policy offers cover for a set period, usually between 5 and 50 years. If you pass away during the term, your loved ones will receive a cash lump sum. However, if you outlive the term, the policy will expire, and no payout will be made.
It tends to be more affordable than whole life insurance, making it an ideal option for those with specific financial responsibilities, like a mortgage.
There are three levels of term cover:
Level term: This type of cover offers a fixed payout that remains the same throughout the policy term.
Decreasing term: The payout amount decreases over time, typically in line with specific debts like a mortgage that reduces as you make payments.
Increasing term: Provides a payout that rises over time, adjusting for inflation. It can be beneficial if you expect your family's needs to grow.
Guaranteed Life Insurance
This type of policy is for people who have health issues that might make it hard to get regular life insurance. It guarantees acceptance for cover without needing a medical exam, making it easier for those who might struggle to gain cover otherwise.
Premiums can be higher compared to standard policies. There can also be waiting periods before a payout can be made.
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Critical Illness Cover
It's not just death that you need to think about when considering life insurance. Critical illness cover can be an important addition, especially for those over 40. This type of insurance provides a lump sum payment if you are diagnosed with a serious illness covered by the policy, such as cancer, heart attack, or stroke.
During this time you could find yourself struggling to cover living expenses or mortgage payments if you are unable to work. That's where critical illness cover can step in to provide financial support, ensuring that you and your loved ones are taken care of during challenging times.
Income protection
Much like critical illness cover, income protection insurance can protect you and your loved ones if you suffer from illness or injury that prevents you from working. This type of policy pays out a percentage of your income for a specified time, helping to cover expenses while you recover.
It can be especially crucial for those over 40, as the likelihood of health issues tends to increase with age. Having this safety net allows you to focus on your recovery without the added stress of money.
How much does life insurance cost for over 40s?
Premiums for life insurance are determined by several factors including age. If you're buying life insurance in your 40s it will cost more than if you were to purchase it in your 20s or 30s, primarily due to the increased risk associated with ageing.
Other factors that can affect premiums include your health history, lifestyle choices (such as smoking status), and the type and amount of cover you choose. So as long as you are in good health and do not smoke, you could still pay relatively low premiums.
Compare quotes online to find out how much life insurance could cost you.
How to lower your life insurance costs
There are several ways you can lower your costs for life insurance cover:
- Shop around: Always compare quotes from multiple insurers. Different companies may offer varying premium rates for the same type of cover.
- Choose term life insurance: Term cover is typically cheaper than permanent life insurance. By selecting term life insurance, you pay lower premiums and get cover for a specific period.
- Maintain a healthy lifestyle: Your health significantly impacts your premium costs. Regular exercise, a balanced diet, and avoiding smoking can help keep your premiums lower.
- Consider your cover: Assess how much life insurance you truly need. Over-insuring can lead to high premiums. Determine the appropriate level of cover based on your financial obligations and dependents' needs.
- Review your policy: Major life changes like getting married, having children, or paying off debt can affect your needs. Assess your policy to check that your cover fits your current situation to avoid overpaying.
See our guide on how to get cheaper life insurance for more information.
Where to buy life insurance
If you are considering life insurance, Cavendish Online is here to help you secure a policy that is both affordable and tailored to your needs. Our expert advisers provide valuable guidance, ensuring you find the ideal policy for you and your loved ones.
Cavendish Online charges a one-time £25 flat fee when you buy with one of our advisers. We’ll automatically place you on an annual review scheme. Speak to an adviser today to get started.
