30-Year Term Life Insurance: Is It a Good Fit for You?

Insurance
mother with young daughter on a sunny day 30 year term life insurance

When you buy term life insurance, it is important to decide how long your policy will need to last. Thirty years is the longest term life policy offered by most insurance companies — and purchasing such a policy will likely depend on your needs. One advantage of a 30-year term life insurance policy is that your insurance coverage stays in place for decades — potentially your entire career.

If you bought a policy with a shorter term, your coverage could end before you retire, in which case you would need to consider applying for a new policy if you wanted to maintain coverage. If you have health problems at that point, your rate could go up — or you might not even be able to qualify.

A 30-year term also keeps your premium the same for the duration of the policy. The price you pay when you first purchase your policy is the same price you'll pay years later. This could make budgeting easier because you don't have to worry about a rate increase as you get older. In exchange, a 30-year term policy may initially cost more than a policy with a shorter length because you're guaranteeing coverage for a longer period.

When Could It Be Suitable?

There are multiple scenarios where a 30-year term life policy could be a good choice. Thirty-year term life insurance could work well for those who want an insurance policy that lasts their entire career. If you are in your 20s, 30s or 40s, your career could likely last at least 30 more years, which means you might be looking for a long-lasting insurance policy. A longer term policy could give you added security while you are in the working world.

A 30-year term life policy could also work well if you don't have children yet, but plan on having them one day. A 30-year term period could give you time to figure out your family plans, and then cover your future children until they come of age.

For example, Susana is recently married and wants to have children in three to five years. If she buys a shorter policy — like a 10-, 15- or 20-year term — the coverage will end before her kids are fully grown. With a 30-year term, however, she can keep her coverage in force even if she waits a few years before starting a family.

These policies could also be useful if you have a spouse who doesn't work and relies on your income. If you just want coverage to protect your children, a 20-year term could be enough to cover them to adulthood.

If your spouse also depends on your income, however, you might consider a policy that lasts your entire career. Additionally, if you take out a 30-year mortgage, 30-year term life insurance would last the entire length of the mortgage.

When Could It Be Less Suitable?

Considering your long-term life goals could be crucial to determining your needs. A 30-year term life insurance policy might not be the best choice if you're unsure about your long-term insurance needs.

The premiums on a 30-year policy may be initially higher than on a shorter policy because you're locking in coverage for a longer period. If you cancel your 30-year policy early, you've likely spent more than you needed to spend. You could have instead purchased a less expensive policy for a shorter period.

Thirty-year term policies may not be an option for applicants who are in their 50s or older. Insurance companies typically have age limits on who can apply for long-term policies, so a 30-year term policy may not be available depending on your age.

Any Other Considerations?

Remember, you can always have more than one life insurance policy. You could choose a 30-year term policy, and then add additional policies with shorter terms as your needs change. For example, Steve buys a $250,000 30-year term life policy right after he gets married. Five years later, he has his first child and decides he would like more coverage — so he purchases a 20-year term life policy to complement his original policy.

Thirty-year term life insurance could be one of the simplest ways to cover your insurance needs. While it might cost more than other term policies, it can serve as your coverage for decades and help give you a sense of comfort.

IMPORTANT DISCLOSURES

1 Source: LIMRA, a life insurance industry association trade group, January, 2016
2 Source: U.S. Bureau of Labor Statistics (www.bls.gov)

Information provided is general and educational in nature. It is not intended to be, and should not be construed as, legal or tax advice. Western & Southern Financial Group and its member companies (“the Company”) does not provide legal or tax advice. Laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy, or completeness of this information. Federal and state laws and regulations are complex and are subject to change. The Company makes no warranties with regard to the information or results obtained by its use. The Company disclaims any liability arising out of your use of, or reliance on, the information. Consult an attorney or tax advisor regarding your specific legal or tax situation.

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