Are you scanning the internet for the average cost of 30 year term life insurance?
If so, you’re in the right place! Life insurance is my business and I’m gonna share the benefits of a 30 year life insurance policy. One of the biggest obstacles I ran into when shopping for life insurance was the web was full of information that assumes a LOT of insider knowledge. Hey, agents know all the lingo, but what about people who are considering buying life insurance for the first time?
They’re complete novices and have no reason to know the jargon we use every day.
So I want to write articles that make life insurance as easy and palatable as possible. Hey, that’s no easy task when you’re talking to people about planning for a visit from the grim reaper. In keeping with my word, I’m going to start with some basics. If you’re already familiar with the terminology feel free to skip ahead.
A term is the period of time you select to be covered. So when I say you’re looking for 30 year term – it means you decided that coverage for that period of time meets your needs. That said, there’s a whole lot of info I want to share. Including information about the average cost of 30 year term life insurance!
So why not grab a seat, put your feet up and dig in!
Who I am and Why I Care
My name is James Heidebrecht and I’m the founder of Policy Architects. We’re a boutique life insurance agency. If you’re looking for a personal touch and agents that take time to really find out what your needs are, we’re the company for you. In today’s fast-paced world it’s easy to get swept away by technology – but sometimes you just need a person!
In my experience, a hands-on approach delivers the best results when it comes to life insurance. Every client who works with Policy Architects goes through a needs analysis. The time you spend with an agent gives us valuable pearls of information that will be used to find the best insurer for you at the lowest cost. Seemingly small savings can translate into thousands of dollars ESPECIALLY when you are talking about 30 year term life insurance cost.
So why not give us a call today? Our advice is free and is bound to save you money, time and hassle.
Now back to our originally scheduled broadcast.
30 Year Level Term Life Insurance
If you're looking for the average cost of 30 year term life insurance, then you're not alone. This is one of our best-selling terms for many reasons. Don't get me wrong there are always situations where lesser terms are more appropriate...
Is '30' the New '20'?
…or you may even purchase a permanent policy. Everyone’s situation is completely different. But 30 Year Level Term Life Insurance ticks a lot of boxes. Hey, I would go as far as to say that 30 year term is now the new 20 year term! We’re living longer than ever, retiring later and taking on more different roles than our parents and grandparents did.
The thing is there is no simple answer to this question. The costs vary as do the reasons people buy 30 year term.
So I’m going to go through some of the top reasons you should consider purchasing a 30 year life insurance policy right now. I will get into the nitty-gritty of the costs later on.
9 Reasons You Should Buy 30 Year Level Term Life Insurance
You're Young & Healthy with Family, Mortgage & Debt
A big part of my business is dealing with young people who are planning for the future. If you have a child or children, life insurance is a no brainer: You’ve got to have it regardless of whether you have a mortgage or not. That being said if you tack those long term debt obligations on – well you’re playing with fire if you don’t have protection. The good news? You’re young and healthy so life insurance coverage is super cheap!
Do you know why life insurance is so inexpensive during this period? Because underwriting is all about risk. The older you are, the closer you are to death and life insurance companies pass this risk on to you through elevated payments. That’s why I encourage people to apply for life insurance when they are young and healthy.
The process is simple and the prices are unbeatable! If you think ahead you could cover your personal circumstances throughout child rearing and university if your kids choose this path.
Yeah well the reason life insurance is so cheap when you're young is because it's HIGHLY unlikely you'll die. So isn't this sort of a scam?
I'm so glad you brought this up. 30 year term life insurance should be a "just in case" safety net. Obviously the GOAL is to live well through the end of your term. BUT if you don't - you know your family won't have to sell the house.
No One Thinks They Are Going to Die - Unless They Have a Grave Illness
Sadly, life just doesn’t work that way. Both my wife and I know people who have young families that sustained a tragic death. Unfortunately, these individuals did NOT have life insurance coverage. Sigh. As you can imagine it’s not an easy situation for the families that have to deal with this situation.
If you take some time to do a needs analysis it will quickly become clear just how important each and every financial and personal contribution is in your household. The smallest change can throw the whole equilibrium off. That’s why life insurance is so important. Let’s say you die in an unforeseen accident. Your loved ones won’t have to sell the family home to satisfy creditors. Remember debt doesn’t die with you.
You've Have a Hefty 30 Year Mortgage
Mortgages are not getting smaller. I live in Toronto and the housing market is on fire! If you want to buy into the market, there’s one simple fact you’re going to have to accept. You will owe a boatload of cash to the bank. Unless you just so happen to be independently wealthy, but that’s not most of us.
So let’s say you’re living with your partner. You don’t have kids but you just bought a fantastic place in Vancouver. Possibly your mortgage is more than $800,000. Even if you don’t have a lot of debt this is a serious sum of money. If you want your spouse to continue to live the life they’re accustomed to chances are you need mortgage life insurance to cover your home. Like many Canadians today, your mortgage is amortized over 30 years. That makes a 30-year life insurance policy ideal for protecting you and your loved ones.
This holds true for any sort of serious long term debt you have.
Protecting Your Mortgage is Really All About Protecting Your Income
The term "mortgage protection" is kind of a misnomer. It's easy to get distracted by the concept of protecting our mortgage. But what you really should be focused on is safeguarding the income that will be paying your mortgage over 25 or 30 years. This is the most important thing! That's why it's best to think of "protecting your mortgage" in terms of "replacing your income".
If you're not here tomorrow, how much of your income will your spouse need to carry on paying the mortgage and any other living expenses? How long will they need your income? These are the two main questions you should be asking yourself when thinking about an amount and length of protection.
Your Millennials Are Never Gonna Leave!
“According to the latest US census data, one-third of adults ages 18 to 34 live at home with their parents” Help – My Millenial Kid Won’t Move Out! Jane Ridley, New York Post
Children are living with parents longer than they did in the past. Secondary education and the fact that life is damned expensive are a few reasons why the kiddos may opt to live with you well into their 20’s and 30’s. These sort of circumstances make a huge impact on your obligations.
That 20 year term life insurance policy that looked like it would cover your family in times of need is inadequate. This is especially true if you are footing the bill for college or university – or even co-signing for a loan for further education. You’re in Term 30 territory NOW!
So if you think your kids may be depending on you longer than you anticipate, 30 year level term life insurance may come in handy.
You Waited to Have a Family or...You're on Your Second
If you’re like me, you waited until you were in your mid-40’s to start a family. Now, you’re in your 50’s, you’ve got a big mortgage, you’re kids are in grade school and won’t be moving out (assuming they do) until you’re in your late 60’s! That 20 year term life insurance policy you bought when you were 40 will only take you to age 60. What’s the average cost of 30 year term life insurance again?
…Or, You’re starting all over again. Sadly 50% of marriages end in divorce – but on the bright side you ended up meeting the love of your life. Despite the fact that you never thought you’d have more kids, you decide to start anew. This means your obligations to loved ones are starting all over again my friend. If you have kids from your first marriage in high school and a brand new baby on the way, a 20 year term life insurance policy just won’t cut it.
The answer? Some 30 year level term life insurance will do the job. It will provide you with monthly rates guaranteed not-to-increase for 30 years.
You Have a Business
Ok, maybe you have all of your family’s needs taken care of! Good for you. You’re one of those prepared people in life and I take my hat off to you. You’ve just hit 40 and a new career is in the cards. You and a partner are renting a space and have taken on a lot of responsibility. Man, the numbers sure add up. So what would happen to your fledgeling business if you passed away suddenly? If your an important part of the business, chances are it will bottom out. A 30 year term life insurance policy will protect your business from an untimely demise. Both you and your partner should hold a policy that will allow the business to continue forward.
Is a 30 year term really necessary? Given that many people now are working into their 70’s, I wouldn’t suggest anything less.
You Want Longer Insurability at a Guaranteed Cost
As you age, your health may decline. It’s one of those things that none of us likes to talk about. A 30 year life insurance policy locks in lower rates for a longer period of time. So if your health declines or you happen to get cancer in year 20, you’re covered. Your family will be taken care of if the worst case scenario unfolds.
If you get a lesser term initially and decide to reapply for a 30 year term later, you’ll have to go through an insurance medical all over again. If your health has changed – it happens – you could be rated and this could mean an increase in your premiums. Not to mention you’ll be older, so by default, you’ll be paying higher rates because as we age each year brings a slight increase in the cost of insurance. In your 50’s and 60’s, rates go up approximately 9% annually.
Depending on your the situation, replacing a term 20 life insurance policy may not be the best option. I sometimes recommend clients keep their term 20 coverage in force and add a smaller Term 30 life insurance policy on top. It’s a cost-effective way of increasing and extending your protection without unnecessarily cancelling insurance that’s already in place and inexpensive.
*NOTE if you’re thinking of replacing an existing life insurance policy, always wait until you have new coverage in force before cancelling your current policy. Speak with an independent agent to get a second opinion.
All term coverage, including 30 year level term life insurance, comes with a convertibility option. All this means is that you’re allowed to convert all or a portion of your term insurance into permanent whole life coverage without any medical test or answering any health questions. With most carriers, you have to exercise this option by the age of 71.
This is something you that would be valuable if you develop a health condition like diabetes, heart disease, etc. It can happen. One of the added perks of a 30 year life insurance policy is that it buys you more time to convert to permanent if need be.
Your Child Has Special Needs
If you have a child with special needs then you know just how time-consuming and expensive it can be. From therapeutic treatment to time off work, the bills add up. This is all well and good if you make enough money to take care of business. But what’s going to happen when you’re gone?
I know it’s hard to think about and a source of anxiety for many parents of children with special needs. The thing is you can’t afford to live in denial. A 30 year life insurance policy buys you some time to work towards a plan – knowing that if you pass away unexpectedly there’s a serious chunk of change available to put towards your child’s needs.
It should be noted that if your child has serious issues and you know he or she will be dependent on you as an adult, a permanent last-to-die policy is the best way to guarantee their protection. A lot of parents in this situation will consider this strategy in combination with a Henson Trust.
Buyer beware. There are a lot of issues wrapped up in this seemingly simple advice. You need to appoint a trustee to manage the funds and you’ll have to also consider all the tax implications of this inheritance. For example, life insurance proceeds can potentially jeopardize a dependent’s eligibility for government services like theDisabilityDisablity Support Program (ODSP). My suggestion? Call the experts at Policy Architects. We can go through all the details with you to find you the best possible coverage.
For more information, check out my post on the pitfalls of selecting a beneficiary here.
The Average Cost of 30 Year Term Life Insurance - Looking at the Dollars and Cents
OK now that you know WHY you may need a longer term the next question on the agenda is what is the average cost of 30 year term life insurance?
This, my friend, is no simple question. The answer depends entirely on your personal situation. This is one of the main points I want to make clear to people BEFORE they apply for life insurance. There are many different variables when it comes to the amount of money you will spend on your life insurance premiums.
So let’s see what circumstances will impact the cost of your premiums.
This is one of the most important considerations when it comes the average cost of 30 year term life insurance! The older you get the more money it’s going to cost you. In fact, the cutoff age to apply for 30 year level term life insurance is age 50 or 55, depending on the carrier you go with. I don’t think I have to go into too much detail about the whys and wherefores of this. Simply put, the older you are, the bigger the risk a life insurance company takes that they will have to make a payout.
I think it’s also important to mention that as you age term life insurance isn’t always my go to. The price difference between term and permanent life insurance narrows. Products that may have been too expensive are now worth a second look.
To give you a better idea of how the average cost of 30 year term life insurance looks over the decades. I’m including some real-time quotes. Please remember as always these quotes are just for reference. Each life insurance company has very different underwriting guidelines so it’s VERY important to evaluate them before you apply. Doing your homework can literally save you 10’s of thousands of dollars over the course of your term.
Obviously, your health plays a big role in how much you’ll pay for life insurance. The one thing I would say however is that you need a real understanding of underwriting to evaluate this properly.
First of all most people underestimate their health. I think there is a fear of being sick that keeps people in a constant state of vigilance. Another issues I see all the time is that clients overestimate the impact of well-controlled conditions like high blood pressure and elevated cholesterol. When controlled these circumstances don’t have as much punch as you may have first thought. I wrote a guide containing more information about High-Risk Life Insurance. You can find out more information here.
Choice Of Life Insurance Company
I repeat this mantra in every single article I write. Not all life insurance companies are created equal. They each have niches they specialize in. This can make the difference between being rated standard of preferred in some instances. Knowing the nuances of the underwriting guidelines will help you choose the right company for your particular needs. This is why you should never use a captive agent. They won’t be able to give you an overview of all the insurers you have to choose from.
In addition to underwriting nuances, some carriers have unique products. For example, Ivari Insurance has a 30 year life insurance policy that has an interesting twist. Ivari’s TERMselect30 has some unique built-in options available to you between year 15 and 20 of your policy. At any point in those 5 years, you can elect to stop paying premiums and receive:
- A reduced amount of paid-up term insurance for the remainder of your 30-year term
- A reduced paid-up amount of permanent insurance for the rest of your life
- Access to a small amount of cash value associated with your policy
For some people looking for more flexibility, this might be a really good fit. Another good reason to work with an independent life insurance agent in knows the ins and outs of the market including the different products available.
Using an Independent Agent
…and last but not least. If you are looking for 30 year level term life insurance, seek the advice of an independent life insurance agent. As I mentioned above we will do a quick needs analysis, talk to you about your personal goals AND go through all the possible choices of insurers to come up with the best fit. I find that more times than not people underestimate their needs.
For example, I have a client who thought she wanted a 20 year term life insurance policy for $500,000. She had a young family was primarily concerned about her mortgage. After we reviewed her circumstances it became more clear that she had debt and was also looking at a raise in the next few years. She expected that her salary was going to double in a fairly short period of time. She also was thinking about having more children. The more we discussed the future she realized that $500K was insufficient as was the 20 year term length. The personal touch made all the difference and I will be reaching out to her to make sure her life insurance needs continue to be met in the coming years.
How to Save Money on The Average Cost of 30 Year Term Life Insurance
It’s true, a 30 year life insurance policy will provide you with rates guaranteed not to increase for 30 years. However, because you’re locking in rates for a longer period, your monthly premium will be higher than if you’d purchased a 10 or 20 year term life insurance policy.
Let’s do an example. Ron is a healthy 40-year-old male, non-smoker. He has a young family and has just bought a home with a mortgage amortized over 30 years. As he expects to retire between age 65 and 70, Ron’s decided $1 million of coverage works to replace his income and mortgage should something happen to him. Like anyone, he’s budget conscious and doesn’t want to spend a penny more than he has to. Let’s take a look at his options.
40 Year Old Male, Non-Smoker, Standard Health Class
$1,000,000 of 30 Year Level Term Life Insurance with Equitable Life of Canada will cost approximately:
How Layering Coverage Can Save You 30% or MORE on Your Life Insurance
So for Ron, $1 million of term 30 will cost him twice as much as a $1 million of term 20: $197 vs. $96 per month. He was hoping to keep his monthly insurance costs closer $100 but he knows a 20 year term won’t provide him with the length of coverage he really needs. Is there a middle ground?
We know as Ron’s kids get older, finish college and move towards financial independence, he’ll have been paying his mortgage down simultaneously. So in effect, his need for life insurance will be decreasing over time. How can this help him save money on his insurance?
By layering life insurance policies he can have coverage that decreases over time along with his needs.
So instead of one 30 year life insurance policy, we’ll recommend Ron purchase 2 separate term policies:
- One 20 year term life insurance policy for $500,000 to insure his kids’ college and the majority of his mortgage
- One 30 year term life insurance policy for $500,000 to cover the balance of his mortgage and replacement income for Ron’s wife until retirement age
In this example, Ron will carry $1 million of life insurance for 20 years just past the date his kids graduate from college. At this time his 20 year term life insurance policy will expire, reducing the cost of his coverage.
Over the next 10 years, Ron will carry his remaining 30 year life insurance policy for $500,000 of coverage (from age 60 to 70). This will provide enough protection to cover his remaining mortgage and bridge the gap before retirement.
Let’s see how much this layered solution will cost Ron per month:
...A 35% Savings!
Over the life of a 30 year life insurance policy, Ron will save $25,614.00!
WOW! that's incredible, layering or blending term insurance policies is definitely worth a savings of $25,614.00!
Average Cost of 30 Year Term Life Insurance Rates
I always like to include basic rates in my life insurance company reviews. They give you a basic idea of what to expect. Just remember, Empire Life may not be the company that works best for your particular situation. Always Consult an independent agent when you're looking for life insurance, it will save you money and time!
* The following 30 year term life insurance rates are from Empire Insurance
*Quotes above are monthly rates for Empire Life’s 30 Year Level Term life insurance, Standard Health Class and non-smoker. Your rates may differ depending on your unique circumstances. April 2019.
*NOTE If you’re 56 or above, you’re not eligible for Empire Life’s Term 30 product. However, you can still purchase a 10 year or 20 year term life insurance policy.
The Average Cost of 30 Year Term Life Insurance & Why You Should Call Policy Architects
If you’re Googling the average cost of 30 year term life insurance, then you should call us today. At Policy Architects you’re a client for life.
Life insurance should never be looked at like a one-off purchase that you can set and forget. The truth is your life circumstances change dramatically throughout your life, so logically your insurance needs with change too.
A 30 year life insurance policy may be the perfect solution to protect you and your family or it may not be. There are times when permanent life insurance is a far better choice. The key to nailing down the coverage that’s right for you is to do a quick needs analysis.
What may seem like the perfect solution may be ill-fitting 10 years down the line. We will discuss all of that at your appointment.
That’s why you should give policy architects a call today. We review the best life insurance companies in Canada so we can help you find the most comprehensive coverage for the best price.