In this post I’ll help you understand how a 30 Year Term Life Insurance policy is different from other term lengths, such as 10, 15, or 20 years, the pros and cons of 30 yr term insurance, and who should buy it. Term life insurance with 30 year level premium takes your average annual premium over a 30 year period. As you get older, the cost to insure you increases, but if you select a 30 year level term, you pay the average premium for those 30 years. It’s the opposite of what happens with your automobile premium or health ins. premium. Rather than increasing every year, it stays fixed for the duration of your term.
Once your 30 year level term has expired, your policy doesn’t necessarily expire. Most term policies will provide coverage for your whole life, typically to age 95 or 99. The problem is after the 20 year term life insurance period or 30 year period has passed, your premiums are guaranteed to increase. At this point, you have a few options. You may continue paying at the increased rate each year. This is known as renewable life insurance. You may be able to convert the policy to a universal life or whole life insurance, providing guaranteed coverage on a permanent basis. Or last, if you are still healthy, you might replace your current 30 yr term insurance with a new 10 or 15 yr level term policy. You would have to provide evidence of insurability, as this would be a brand new policy, even if you purchased it from the same insurance company.
30 Year Term Life Insurance Advantages & Disadvantages
Advantages of 30 Year Term: Your premium is fixed during your term. It can’t increase, even if you get cancer or have a heart attack. The premium is higher than 10 or 15 year term because you’re locking it in for a longer period of time, and over 30 years there’s a higher chance of death than in 10 or 20. After the 30 years, if you don’t die, you may still convert the policy to Universal Life, with no proof of insurability. This benefit could save you thousands of dollars, or allow you to keep a policy when unhealthy that you wouldn’t be able to purchase if you were to try to purchase a new policy. Not all life insurance companies offer conversion on their term policies. Primerica is one example of a company that does not allow conversion. Be sure your company does. All of the policies I sell have the conversion option. 30 year term life insurance also typically costs half that of a universal life policy, but still provides protection for a long, long time.
Disadvantages of 30 Year Term: A bit more costly than the lower length terms. Also, if your term expires and you still need coverage, the renewal rates are typically astronomical. One more con we’ve seen lately is in the conversion options. When you go to purchase a term policy and think there’s a chance you’ll convert the policy at some point, check the conversion options. If you can only convert it to a whole life policy, I’d pass. I’m not a fan of whole life insurance. It’s overpriced. Typically twice the cost of a guaranteed universal life policy that also covers you to age 100 guaranteed. Back to my point about term and conversion… You should buy a policy that will allow you to convert to ANY of the companies permanent products. The problem is that if you go to convert 25 years down the line, the company may not still have a low priced permanent product, and you may be forced into converting to a high priced whole life policy. The bottom line is if you think you may need coverage for life, carefully compare a 30 year product with good conversion privileges to a Guar. UL to age 100.
Who Should Buy a 30 Year Term? That’s simple. Anyone in their 20’s or 30’s should probably buy 30 year term, since they almost certainly have 30 years of work left in their carrier. Life insurance is primarily purchased to replace lost income, so think about how long you expect to work. However, it’s possible even if you expect to work for another 30 years, that a shorter term would be suitable. Say you’re 32 years old, have a 15 year fixed mortgage, and are contributing the maximum amount to your 401k and IRA annually. If you think about the balance sheet 20 years down the line, your investments will be worth more than ever, and debts worth less than ever. Just a 15 or 20 year term could be the right choice for you if you, but keep in mind, it’s a bit risky to cut the term, because you never know if all your financial goals will be reached as you’ve planned.
30 Year Life Insurance Quotes: For an instant quote, use the form on the right. There’s no hassle of filling out some 3 page questionnaire (like on other sites) before you see your quotes. Just fill in the fields shown, and your quotes will appear on the next page. Simple, easy, and quick 30 year term life insurance quotes.
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