40 Year Term Life Insurance Policies: A New Option For People Seeking Longer Contracts

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It’s a basic fact of life insurance that term policies have an end date. The majority of people who choose to purchase a term life insurance policy are also very likely to outlive their contract.

In general, this is a good thing. You don’t ever want to have to use your life insurance policy, but it is there to provide financial support to your beneficiary should the unthinkable happen to you.

Plus, for many people, the end of their term is also a time when they are less likely to need life insurance coverage anyway. Most term lengths are planned with the goal of covering major financial milestones.

For example, you may really only need a life insurance policy to last long enough until you have reached retirement or until your children have finished school and even up until your mortgage has been paid off.

Once those milestones are reached, many people can purchase a smaller benefit amount or final expense insurance, rather than keeping the large payout once their term insurance contract has expired.

When it comes to choosing a term length, not everyone will have the same financial needs, and that’s why there are multiple options to choose from. A twenty-year term length might sound like a long time, but if you’re young when you buy a policy, you’ll probably still be working when your term ends.

You might also still have serious financial responsibilities. Even a thirty-year term, the longest term generally offered by most life insurance companies, will still leave many buyers relatively young when their term ends.

It’s been a source of frustration for many life insurance shoppers that they have to choose from a too short term length or a too expensive permanent life insurance plan.

That’s part of why a new term length has recently entered the term life insurance world. 40-year term policies are now an option with select companies.

Banner Life insurance was the first company to offer this extended term length, and as of recent, Protective Life has thrown its hat into the ring, making the 40-year term contract length an available option.

So, should you be interested in a 40-year term policy? Who is it a good fit for? How do prices compare to other term lengths? Read on for answers to all those questions and more.

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Term Life Insurance Vs. Whole Life Insurance Vs. Guaranteed Universal Life

When people talk about life insurance, they’re often talking about one of three options, either term life, whole life, or universal life. Regardless of the three options, all are designed to replace your income and protect your family financially if you die unexpectedly. Still, there are some major differences between the different options.

Whole life policies cover you for your entire life. From the day they go into effect until the day you die, you’ll be covered no matter how long you live.

In addition to providing lifetime coverage, whole life policies also act as a savings account because they build guaranteed cash value. Whenever you pay your premiums, a portion will go towards your life insurance cost, and another portion will go towards your cash value savings account.

Having a cash value account allows you to borrow against your cash value without penalty. This makes whole life an appealing option for people who want both insurance protection and a savings vehicle.

Guaranteed universal life policies share a common feature to whole life, and that’s that they are both permanent life insurance. Both whole and universal policies are intended to cover you for the rest of your life and have a guaranteed payout, no matter when you die.

On the other hand, guaranteed universal life policies will be much cheaper than whole life insurance as it does not build up cash value growth. Instead, these plans are designed to focus on offering a low-cost permanent life insurance option rather than requiring a higher premium that is needed to build a cash value.

In fact, some people refer to this option as permanent term life insurance because of the similarities it shares with term life insurance. They generally have a premium that will never change starting day one of having the coverage and typically lasting to age 120.

Term life insurance policies do not last your entire life, and they don’t have a cash value. However, term life policies offer large benefit amounts at much more affordable rates than what they would cost with the two permanent life insurance options.

No matter how old you are, you could secure a term life policy with a large death benefit amount for significantly less than whole life or a guaranteed universal life policy. You’ll have the same coverage in terms of benefit payout, but you’ll pay a lot less for it.

Why? Because term insurance is temporary life insurance based around contract lengths of 10, 15, 20, 25, 30, and now 40 years. Plus, term lengths are often enough to cover people when they have the most financial obligations.

In all cases, you’ll get a set rate when you’re approved for a policy. That’s why it’s best to buy a policy when you’re young and healthy. You’ll get to keep the rates you were assigned based on your age and overall health even as you age and even if you develop health conditions later on.

40 Year Term Life Insurance Policies

Until very recently, if you wanted a term insurance contract that lasted more than thirty years, it wasn’t an option. That’s no longer the case anymore. Both Banner Life and Protective Life shocked the insurance industry by adding the option to purchase a 40-year term contract length.

These policies are no different from any other term lengths, except the coverage will last for forty years. Just like all term policies, your rate will be locked in when you’re approved, and you’ll keep that rate over the life of your policy. That’s a pretty big deal when you’re looking at the next 40 years.

After all, your health is likely going to be a lot different at 40 than at 80. This alone can make 40-year policies an appealing choice. You’ll pay more than you would for a 10 or 30-year term, but you’ll likely pay a lot less than you would for a permanent life insurance plan.

Who Are The Best Candidates for 40-Year Term Policies?

There are multiple scenarios where a 40-year term policy might be a great move for your family. One of the most common is if you’re a young family with children. If you’re in your thirties with a few young children, you might be the perfect candidate for a 40-year term plan.

A 40-year term would provide financial protection to your spouse and children seeing that financial security and other financial challenges are met if you were to pass away during the timeframe of having your coverage.

If you buy a 20-year term policy at 35, you’ll likely still be working when it ends. If you buy a 40-year policy when you’re 35, you’ll most likely be retired by the time it ends.

As a rule, 40 years can give you time. More time to work, more time to pay off your mortgage, and any other financial obligations your loved ones depend on from you.

It’s added security, and it can come in handy for a lot of people. For years there has been a trend toward people having children later, retiring later, and making other major life financial choices later in life than previous generations. 40-year policies reflect these changes and help you have security for years, no matter what those years bring.

Keep in mind you’ll lock in rates at the age you are when you buy the policy. That means if you’re 35 when you purchase your policy, you’ll continue to pay the same rate up to age 75.

If you experience a change in health at any time during the course of having your contract, you’re still going to keep paying the same rates when you were a healthy 35-year-old. Plus, since it’s a term policy, those rates are likely to be a lot less than if you bought a permanent life insurance policy.

Another benefit? Both Banner Life and Protective Life offer a conversion rider on their 40-year term contracts. You can convert your term policy into a permanent life policy without having to provide evidence of insurability. 

Your rates will go up, but you’ll be guaranteed to get coverage. You won’t have to reapply or take an exam. That’s a pretty appealing feature, especially since it can be difficult to find policies in your 70s and 80s.

Plus, depending on when you buy it, a 40-year policy could end up lasting the rest of your life. While it’s theoretically possible that any life insurance policy could last the rest of your life, after all, the possibility of an unexpected death is what you purchase policy for.

However, with term insurance, it’s not uncommon for most people to outlive their term coverage. That’s part of why term policies are so inexpensive. Most people outlive them. If you buy a 20-year policy when you’re 29, the odds are very high that you’ll never use it.

On the other hand, if you buy a 40-year policy when you’re 40, it just might last the rest of your life. In fact, According to the United States Centers for Disease Control and Prevention (CDC), a 40-year-old in the United States has an average life expectancy of about 40 more years.

Of course, that’s an average and not a rule. More people are living into their 90s and even 100s than ever before. It’s not out of the question that a 40-year policy could last the rest of your life, especially if you’re in your 40s when you buy it. That means you’d be covered for life without the cost of a whole life policy.

Drawbacks to Buying a 40-Year Term Policy

A 40-year term policy isn’t for everyone. There are some definite drawbacks you should be aware of. For one, not everyone can buy a 40-year policy. Both Banner and Protective have a maximum issue age of 45. If you’re over 45, you will not be eligible to apply for a 40-year-term insurance plan.

Another drawback?

Price. While you’ll pay a lot less than you would for a permanent life insurance policy, your rates will be higher than a standard 20-year term or even a 30-year term.

Since one of the main draws of term life is its affordability, the higher premiums of 40-year policies can make it seem a lot less desirable. Plus, the higher premiums might not be in people’s budgets, leading them back to looking at shorter term lengths.

Something else to consider is that, currently, these policies are only offered by two companies. One of the biggest tips for securing an affordable life insurance policy is always to shop around.

You can always find better rates by looking at policies and quotes from multiple companies. Since there are only two options for 40-year terms, you can’t really follow this advice.

You can’t price shop from multiple providers when there are only two options. If you know a 40-year policy is what you need, this might not be a big deal, but it’s definitely something you should be aware of.

It’s also important to point out that you’re going to be limited to only the policy features they can offer because you’re limited to two companies. This means you could be giving up on some popular policy riders, such as living benefits or even some of the newer accelerated underwriting programs.

All that said, one of the primary reasons not to get a 40-year term is that for many people, it’s longer than they need. 40 years is a long time, and while for some people that term length might be perfect, for many others, it’s just not necessary. There’s no reason to pay more for coverage you don’t really need.

The final drawback to buying a 40-year term contract comes to how old you are when the coverage ends and if you will still require coverage. Converting your plan will be costly at an older age, and finding new term coverage may not be a viable option. 

You will likely have the option to get a burial insurance plan but keep in mind, the death benefit on those policies is often limited to $25,000.

No Medical Exam Options

Banner and Protective both offer an accelerated non-medical underwriting option to qualifying applicants.

Not everyone will qualify for this program. You’ll need to meet the underwriting requirements to skip the medical exam, or you could be asked to take a medical exam in order to proceed with the underwriting process.

The accelerated underwriting process requires a telephone interview in which you will be required to answer application questions and health questions. Based on your answers and data provided by third-party sources, it will be determined if you qualify to skip the medical exam.  

If you can meet the underwriting guidelines to bypass the medical exam, your coverage can begin very quickly.

If you need to take a medical exam, it will be a standard life insurance medical exam, which will be completed at your convenience and at no cost to you. The company will evaluate that information and then either assign you a rate or deny your application.

Some health information company’s look for from your exam includes:

  • Your BMI
  • Your blood pressure
  • Your pulse
  • Your cholesterol and lipids

The exam will also gather blood work to give a picture of how your organs and body systems are operating.  This often includes your cholesterol, blood pressure, liver, kidneys, and pancreas. You’ll also be tested for the presence of alcohol and drugs in your system.

Banner Vs. Protective Coverage

Banner and Protective offer a competitive 40-year term insurance plan. They are so competitive that they are nearly identical in the features they can offer.

For starters, each of the two companies offers the contract length to people who are under the age of 45. If you’re a smoker, you’ll need to be under 40. The minimum death benefit for each is $100,000.

Each offers the same accelerated underwriting process that may allow you to skip the medical exam after completing a quick telephone interview. Medical exams can also be required by both companies if requested.

Protective offers the advantage here since you can apply for up to $1,000,000, whereas Banner limits the million-dollar accelerated option to age 40 and younger.

When we view available policy riders, each of the two companies offers almost identical policy riders, but again, we lean towards Protective having the upper hand. Protective can offer an accidental death option and a stronger child term option than what Banner can offer.

Banner wins when it comes to conversion. Protective Life only offers the option to convert your coverage in the first 18 policy years, while Banner allows for it to be requested at any time before the end of the term or before age 70.

Price can often be a major determining factor when buying a life insurance policy. When comparing the two, you’re not going to find a major difference between the two. They are so close that they tend to be just a few cents often off. Again, Protective is the company that generally comes out ahead as the cheapest 40-year term option.

Who is the winner?

Protective Life. 

Banner Life
40 Year Term Life Insurance

Banner Life is owned by the large Legal & General America company, which also operates William Penn Life Insurance for life insurance issued to New York residents. Banner has an A+ rating from A.M. Best, indicating its financial strength and overall trustworthiness.

Company: Banner Life

AM Best Rating: A+ (Superior)

Policy Name: OPTerm 40

Issue Ages: 20-45 non-tobacco; 20-40 tobacco

Minimum Amount: $100,000

Maximum Amount: $1,000,000+

Approval Classifications: Preferred Plus, Preferred, Standard Plus, Standard, Tobacco, and Substandard

Conversion Option: Available throughout the level premium period or to age 70, whichever comes first.

Medical Exam Requirements: Banner offers an accelerated non-medical exam underwriting option to qualifying applicants. You must be between the ages of 20-45 and open to completing a telephone application interview. If you meet the accelerated underwriting guidelines, you will bypass the medical exam process and receive approval either instantly or within 48 hours. If you do not meet the underwriting guidelines for accelerated underwriting, you will be required to complete a medical exam. This program is limited to applicants applying for coverage amounts of $100,000 up to $1,000,000.

  • Ages 20-40, Amounts $100,000-$1,000,000
  • Ages 41-45, Amounts $100,000-$750,000

Available Policy Riders:

  • Accelerated Death Benefit allows for the death benefit to be accessed if diagnosed with a qualifying terminal illness. The maximum amount that can be taken from the death benefit is the lesser of $500,000 or 75% of the death benefit.

This rider is available at no additional cost

  • Children’s Rider provides all eligible children of the insured with life insurance protection up to age 25. Coverage options include your choice of $5,000 or $10,000 in death benefit coverage, which is convertible to permanent life insurance when the child reaches the age of 25.

This rider is available at an extra cost.

  • Term Rider 10, 15, and 20 is a cost-effective way to structure your death benefit along with your premium payments to decrease at specific policy anniversary years automatically.

This rider is available at no additional cost

  • Waiver of Premium waives all premium payments after six months of being medically diagnosed as being total disability. Premiums can continue to be waived until age 65.

This rider is available at an extra cost.

Protective Life
40 Year Term Life Insurance

Protective also earns an exceptional A+ rating from A.M. Best, so you can feel secure if you choose one of their policies. Protective was the second national brand to offer the 40-year term contract a solid competitive alternative to Banner.

FULL COVERAGE REVIEW: Protective Term Life Insurance

Company: Protective Life

AM Best Rating: A+ (Superior)

Policy Name: Classic Choice 40-Year Term

Issue Ages: 18-45 non-tobacco; 20-40 tobacco

Minimum Amount: $100,000

Maximum Amount: $1,000,000+

Approval Classifications: Select Preferred, Preferred, Non-Tobacco, Tobacco, and Substandard

Conversion Option: Can be converted into permanent life insurance anytime up to policy year 18.

Medical Exam Requirements: Protective offers an accelerated non-medical exam underwriting option to qualifying applicants. You must be between the ages of 20-45 and open to completing a telephone application interview. If you meet the accelerated underwriting guidelines, you will bypass the medical exam process and receive quick approval for coverage. If you do not meet the underwriting guidelines for accelerated underwriting, you will be required to complete a medical exam. This program is limited to applicants applying for coverage amounts of $100,000 up to $1,000,000.

Available Policy Riders:

  • Accidental Death Benefit Rider allows you to add a second death benefit to your base coverage that will pay if your passing is caused as a direct result of an accident. The additional amount of coverage can be purchased from $1,000 up to a maximum of $250,000.

This rider is available at an extra cost.

  • Children’s Term Life Insurance Rider provides all eligible children of the insured with life insurance protection up to age 25. Choose from coverage starting at $1,000 up to $25,000, which is also convertible to permanent life insurance when the child reaches the age of 25. When converted, the death benefit may be increased by 5x the amount of the original coverage received as a child rider.

This rider is available at an extra cost.

  • Income Provider Option Endorsement allows the policyholder to structure how the death benefit will be paid to the beneficiary when the insured has passed away. By default, death benefits are paid in one lump sum payment. The IPO rider allows you to choose for the death benefit to be paid in installment amounts over a period of time.

This rider is available at no additional cost

  • Waiver of Premium waives all premium payments after six months of being medically diagnosed as being total disability. Premiums can continue to be waived until age 65.

This rider is available at an extra cost.

  • Terminal Illness Endorsement allows for the death benefit to be accessed if diagnosed with a qualifying terminal illness. The maximum amount that can be taken from the death benefit is the lesser of $1,000,000 or 60% of the death benefit.

This rider is available at no additional cost

Life Insurance Rates for 40 Year Term Policies

Your rates for a 40-year term policy will depend on your age, health, and other underwriting factors determined by the insurance company.

To provide you with a small sample of some actually rated offered between the two companies, we have put together a comparison table of the monthly cost for a $1,000,000 40-year term plan at the preferred plus health classification.

Be sure to use our online quote tool to view rates based on your own unique health classification along with the coverage amount you require for your family.

$1,000,000 40-Year Term Life Insurance Sample Rates

MaleBanner OPTerm 40Protective Classic Choice 40
Age 30$101.35$101.29
Age 31$104.33$104.27
Age 32$110.69$110.64
Age 33$117.48$117.42
Age 34$125.79$125.74
Age 35$134.33$134.26
Age 36$147.34$147.28
Age 37$160.74$160.69
Age 38$178.06$178.01
Age 39$197.79$197.74
Age 40$220.02$219.96
FemaleBanner OPTerm 40Protective Classic Choice 40
Age 30$71.76$71.69
Age 31$74.88$74.83
Age 32$78.66$78.60
Age 33$82.60$82.55
Age 34$86.98$86.93
Age 35$92.02$91.95
Age 36$106.27$106.21
Age 37$121.60$121.55
Age 38$138.53$138.48
Age 39$156.18$156.12
Age 40$174.76$174.70

*Preferred Plus Non-Nicotine underwriting classification. Monthly Male/Female premium rates current as of 01/26/2021 representing the cost of a $1,000,000 40-year term life insurance policy with both Banner Life OPTerm 40 vs. Protective Classic Choice 40.

When a 40-Year Term Contract Ends

When a term policy ends you have a couple of options. Your first option is to simply let your policy expire. Many people no longer need the coverage of their term policy and don’t mind letting it end.

You can then choose to apply for a policy with a much lower face amount, or apply for a final expense policy instead. Your rates will be higher because of the time that’s passed since you took out your term policy, but you’ll be paying for a lot less coverage.

For example,  let’s say you took out a 20-year policy for $750,000 at 35. You were in great health when you got the policy and paid a premium of $40.00. At the end of your term, you simply let your policy end.

You look at the financial obligations you still have and determine you need to take out a policy of only $50,000. You shop around and get quotes of around $40.00 a month, leaving you paying exactly what you were before.

Even though you’re 20 years older, you’ve also cut your death benefit amount down significantly. Your rates will reflect this. 

Of course, this isn’t the best solution for everyone. You’ll need to apply for a new policy, and you might not be accepted. If you’ve had major declines in health, you could be turned for coverage, or offered coverage that’s out of your budget, even for a smaller death benefit.

Even if you’ve stayed in fairly good health, this isn’t always the best solution. In many cases, you might still need that large coverage amount. If your financial obligations haven’t changed, it might not make sense to purchase a smaller policy.

That’s why many policies offer you other options. Term policies often have a rider that allows you to convert your policy to a whole life policy without applying for new coverage.

Your coverage will be guaranteed if you take this route, meaning you’ll get to keep your policy even when the term ends. However, you won’t’ get to keep your rate. Once your term ends, your rates will jump up. You can go from paying $30 one month to over $100 the next month when your term ends. That’s a big adjustment, and a big strain on some budgets.

Both options are great for some circumstances. You can plan your next steps and your budget if you’re prepared for your term to end. Keeping an eye on your policy can help you make smart financial choices as your term comes to a close.

The choices you make at the start of your term can make it a lot easier, too. Selecting the right term length is an important part of selecting the right policy. However, sometimes a standard policy length just isn’t long enough. If you’re looking at your finances and not sure thirty years is enough to cover you, a 40-year term might be ideal for you.

40 Year Term Life Insurance Vs. Guaranteed Universal Life

When it comes to 40-year term plans, a large part of the appeal is that they can be a middle ground between a standard 20-year term policy and a costly whole life policy.

40-year policies allow you to get decades of coverage without the high costs, but they’re not the only option. Another option if you’re looking for long coverage at lower rates than whole life insurance is guaranteed universal life.

A guaranteed universal life policy is a  type of universal policy, meaning it’s designed to last the rest of your life. Unlike other lifelong policies, however, a guaranteed universal life policy builds little, if any, cash value. Since it doesn’t include a cash value component, it’s much cheaper than most whole or universal life policies. 

A guaranteed universal life policy will be more expensive than a 40-year term, but not by much. For this reason we do recommend that you compare the cost of a 40-year term policy to the cost of a guaranteed universal life plan to see if it makes sense paying a few extra dollar to get a permanent policy rather than a term policy.

If you’re not sure which option is best for you, one of our licensed agents can help. You can tell them about your financial goals, health status, and lifestyle, and they help you determine what policy type is best for you.

Final Thought

For some life insurance shoppers, a 40-year term is an ideal way to get the coverage they need. The longer-term length can help plan for the future and protect their loved ones for decades.

They’re not for everyone, though. For many people, the term is too long, and the cost is too high. Other people might be put off by the need for a medical exam or how new 40 year terms are.

No matter what you’re looking for, No Medical Exam Quotes can help you start your search. We can show no-obligation quotes from the very best no exam term life companies.

Just fill out our quick form to get started today.

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Jeffrey Manola - Life Insurance Expert

Jeffrey Manola - Life Insurance Expert

Jeffrey Manola is the founder of No Medical Exam Quotes, an online insurance broker with a strong focus on helping people shop for the perfect life insurance policy. Jeffrey is both a licensed life insurance expert and content creator for the website. Before becoming a licensed life insurance agent, he served in the United States Marine Corps. He transitioned from serving his country to helping families find affordable life insurance coverage since 2009. No Medical Exam Quotes is licensed to offer life insurance coverage in all 50 U.S. States.

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