February 25, 2019

30 Year Term Life Insurance: What You Need to Know

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30-year term life insurance is a popular choice. But is it right for you? Check out the benefits and other options you should consider in our guide.

Think about what might happen in the next 30 years of your life:

These life events require the right life insurance to protect your loved ones - and investments - once you're gone. A 30-year term life policy may be the best choice.

Keep reading to learn more.

How Does 30-Year Term Life Insurance Work?

With a term life insurance policy, your coverage ends after a certain amount of time. A 30-year term life means 30 years the policy expires 30 years after it began.

You Should Know: Generally, a 30-year term is the maximum length of coverage offered. It is usually available to those ages 18 to 50.

Coverage amount options typically range from $100,000 to $5 million.

To buy a 30-year term life insurance policy, here's what you'll do:

  1. Provide basic information, such as:

    • Gender
    • Date of birth
    • The state where you live
    • Coverage amount desired
    • General health status, such as excellent, good, average, fair
    • Whether you smoke

  2. Receive a quote for coverage. This quote is ONLY an estimate. Use it to compare the cost and coverages to other companies.

  3. Complete an application and take the required medical exam.
    The application will ask comprehensive questions about:
    • Your current and past medical conditions
    • Employment information
    • Annual income
    • Driving record
    • Lifestyle
    • Family history

The life insurance company will then review your application and provide a premium amount based on your risk factors.

These include:

  • Age
  • Gender
  • Occupation
  • Health
  • Whether or not you smoke
  • Whether or not you take part in risky hobbies or activities

Once you make the first payment, the policy is issued. Your premium amount and the coverage amount do not change throughout the 30 years.

Does term life insurance have cash value?
No, only permanent life insurance includes a savings feature that builds cash value.

But since term insurance costs much less than permanent insurance, you can use your insurance savings to invest on your own.

Compare Life Insurance

What Happens When the Term Ends?

When the 30 years end, you have three options:

  1. Renew the Policy
  2. Choose a Lower Term
  3. Convert it to Permanent Insurance (universal or whole)

Renew or Choose a Lower Term
Remember: You will be 30 years older when your policy ends. This means you will pay a higher premium for all three options.

Why? Your age puts you at a higher risk for life insurance companies having to pay out benefits.

How much more will I pay?
Let's say you were 28 years old when you took out the 30-year term life policy. Your monthly premium amount for $500,000 in coverage was $35.50.

Now you are 58. The highest term you now qualify for is 20 years. The monthly premium amount for a $500,000 policy is $208.50.

Permanent Life Insurance
A whole life insurance policy at age 58 for $500,000 in coverage would cost about $1,351.00 a month.

Keep in mind this type of policy also builds cash value. Over time, the value can be used as savings, a loan, or to pay your premiums.

Is Whole Life Insurance a Bad Investment?
There are many reasons that whole life insurance is a bad investment.
  • It's very expensive.
  • It takes many years to build its cash value
  • As a retirement planning vehicle, there are more diversified retirement planning options with better rates than whole life's cash value.

Another permanent life insurance option is universal life. This type of policy also builds interest and allows you to change your coverage and premium amounts.

At age 58, the cost of a $500,000 universal life insurance policy is about $725.00 a month.

As you can see, life insurance costs increase significantly as you age. Keep reading for other things to consider before taking out a 30-year term policy.

Advantages of 30-Year Term Life Insurance

A 30-year term life insurance policy provides affordable coverage during the years when you need it most.

These are the years when you buy a house, start a family, send your kids off to college, and other major life events.

Here are other 30-year term life insurance advantages:

Fixed Premium Amount: Your premium amount remains the same during the entire 30 years. This is a good thing because as you age, the cost of life insurance increases.

Fixed Coverage: The amount of coverage you select will not change during the entire 30 years. Even if your health changes, your policy's benefits remain intact.

Cheaper than Permanent Insurance: Term life insurance is typically less expensive than whole life, universal life, and other types of permanent insurance. In some instances, the cost savings is close to 50%.

$250,000 Policy Monthly Costs for a 25 Year Old
30-Year Term Life$21.50
Universal Life Insurance$63.00
Whole Life Insurance$178.00

30-year term life insurance also has some drawbacks. We cover those below.

Disadvantages of 30-Year Term Life Insurance

Higher Term Price: Compared to 10- or 20-year term policies, 30-year term life insurance costs more.

The longer the term, the greater the risk for the insurance company. This translates to you paying a higher premium.

$500,000 Policy Monthly Costs for a 30 Year Old

Coverage Ends: After the 30 years end, so does your coverage. If you outlive your policy, you have nothing to show for the amount of premiums you paid over the 30 years.

TIP: You can often add riders (more on those later) to term life policies. The policies will cost more. But they offer options for continuing coverage or getting premiums reimbursed.

No Conversion Options: Not all term life insurance policies include a conversion option to permanent life insurance when your term expires.

Without this option, it will cost you substantially more to replace your expired policy with another one because you're older.

TIP: A good 30-year term life insurance policy has wide-ranging conversion options. Among them are converting to a whole life policy or a guaranteed universal life insurance policy that covers you to age 100.

Not Available to Everyone: Most insurance companies do not offer 30-year term life insurance policies after age 50.

Is 30-Year Term Life Insurance Right for Me?

A 30-year term life insurance policy offers long-term protection for your family and investments.

Here are some instances when 30-year term life insurance may be the right option for you:

You're a 20- or 30something without coverage
Young single people don't think they need life insurance. After all, they don't have families relying on them.

But if disaster strikes, someone will need to pay for your care or funeral and burial costs. This places an unnecessary burden on your loved ones at the worst possible time.

A 30-year term life insurance policy is very affordable in your 20s and 30s. Here's a look at monthly price points at various age ranges and coverage amounts.

Ages 20-25
$100,000 Coverage$13.50 - $14.20 per month
$250,000 Coverage$21.00 - $23.00 per month
$500,000 Coverage$30.50 - $37.20 per month
$750,000 Coverage$46.20 - $50.00 per month
$1 Million Coverage$54.80 - $73.25 per month
$3 Million Coverage$166.85 - $172.00 per month
Ages 26-30
$100,000 Coverage$13.95 - $14.30 per month
$250,000 Coverage$14.15 - $24.60 per month
$500,000 Coverage$34.55 - $43.20 per month
$750,000 Coverage$48.80 - $51.40 per month
$1 Million Coverage$63.00 - $79.65 per month
$3 Million Coverage$177.20 - $187.60 per month
Ages 31-35
$100,000 Coverage$14.45 - $23.60 per month
$250,000 Coverage$23.25 - $27.25 per month
$500,000 Coverage$37.10 - $44.45 per month
$750,000 Coverage$52.65 - $63.65 per month
$1 Million Coverage$68.25 - $82.90 per month
$3 Million Coverage$192.75 - $236.70 per month
Ages 36-39
$100,000 Coverage$16.44 - $19.85 per month
$250,000 Coverage$26.25 - $35.15 per month
$500,000 Coverage$47.50 - $61.70 per month
$750,000 Coverage$65.25 - $86.95 per month
$1 Million Coverage$87.15 - $115.40 per month
$3 Million Coverage$254.75 - $329.70 per month

You're Starting a Family
As the main income provider, you need to make sure your family is protected if something happens to you. That means covering your:

  • Missing income and future life expenses
  • Family expenses
  • Home mortgage, car loans, and other debts

A 30-year term life policy provides the coverage you need during the years when your income is needed the most.

You Have a 30-year Mortgage
Without life insurance, the loved ones you leave behind could lose your house to the mortgage lender. A 30-year term life insurance policy can pay off the remaining balance if you're no longer around.

You're Nearing Retirement Age
If you currently have a life insurance policy through work, it will end when you retire. A 30-year term life insurance policy can supplement it.

This is especially true if you have loved ones who will be depending on your retirement income or there is a remaining mortgage on your home.

You Have A Lot of Debt
Not all debts die with you. In many cases, your spouse, loan cosigner, or a family member is left with the burden. It's not the legacy you want to leave.

For a manageable monthly premium, you can purchase a 30-year term life insurance in an amount that covers your debts if you die before they're paid off.

You Have a Special Needs Dependent
If a special needs child or adult depends on your income and care, a 30-year term life policy gives you an affordable way to provide should something happen to you.

A 30-year term policy also gives you time to establish the best financial security plan to provide future lifelong care and income to your special needs dependent.

Riders That Can be Added to a 30-Year Term Life Insurance Policy

Riders in the insurance world are like side orders on a restaurant menu. They don't come with the policy, but you can add them for an additional cost.

When taking out a 30-year term life policy, one or more of these riders may be beneficial for your particular needs.

Term Conversion Rider
This rider allows you to convert your 30-year term policy into permanent life insurance before it expires. A key benefit with this rider is you do not have to take another medical exam to get the new policy.

Choose this type of coverage if you want to keep open the option of locking in coverage for life in the future.

Key Fact: The cost to add this rider differs among life insurance companies. Some include it at no additional cost. Others charge for it, which will increase your premium amount.

Return of Premium Rider
If you take out a 30-year term life insurance policy in your 20s or 30s, chances are you will outlive the term. Rather than walk away with nothing after paying premiums for 30 years, you get reimbursed for the full amount of premiums paid.

That's a big chunk of money, which you can use to reinvest in another life insurance policy. However, a return of premium rider significantly increases the cost of your 30-year term policy.

Here's a cost comparison of the premium amount with and without the rider for a $250,000 policy:

With the Rider:$880.00 a year
Without the Rider: $562.00 a year
Difference:$318 a year

Over 30 years, that yearly difference adds up to $9,540 more you paid for the rider. Whether this is a good investment depends on your situation.

To help in your decision-making, ask yourself these questions:

  • Are you looking to keep your term life premium amount as low as possible?

  • Will you need another life insurance policy or was this 30-year term used to protect your home until the mortgage was paid?

  • Would the difference saved without the rider serve you better invested in an IRA or other savings and investment vehicle that earns interest?

Disability Income Rider
This rider kicks in if you become permanently disabled. Permanently disabled means you will not be able to work again.

With this rider, you no longer have to pay the premiums remaining on your 30-year term life insurance policy. Additionally, your policy will replace your income, according to the rider's terms.

TIP: Make sure you buy a disability income rider that pays for both accident AND illness disabilities. Some riders only cover accident disabilities.

The cost to add a disability income rider to a 30-year term life insurance policy is determined by your age, occupation, and health. Overall, you can expect a premium increase of 10 to 15 percent with the rider.

How Much Does a 30-Year Term Life Insurance Policy Cost?

The cost for a 30-year term life insurance policy differs from individual to individual. That's because numerous factors about a person determine the price.

These factors include:

  • Age
  • Gender
  • Smoker Status
  • General Health
  • Lifestyle
  • Driving Record

You Should Know: As a rule, 20-something females who are nonsmokers, in excellent health, living a sensible lifestyle with a clean driving record pay the lowest for a 30-year term policy.

How Much Does a 30-Year Term Life Insurance Policy Cost?

Here's a look at some average annual rates for 30-year term life insurance policy coverages for males and females of different age groups and health status.

Average Health Non-Smoker

Male Ages 18 to 28
$100,000 Policy$155.40 - $157.80
$250,000 Policy$258.00 - $264.00
$500,000 Policy$396.60 - $405.00
$1 Million Policy$661.20 - $710.40
Female Ages 18 to 28
$100,000 Policy$143.40 - $149.40
$250,000 Policy$222.00 - $235.20
$500,000 Policy$324.00 - $334.20
$1 Million Policy$585.00 - $606.00
Male Ages 29 to 39
$100,000 Policy$159.00 - $233.40
$250,000 Policy$266.40 - $379.80
$500,000 Policy$406.20 - $651.00
$1 Million Policy$720.60 - $1,169.40
Female Ages 29 to 39
$100,000 Policy$151.80 - $210.00
$250,000 Policy$240.00 - $316.20
$500,000 Policy$339.60 - $526.80
$1 Million Policy$616.20 - $960.60
Male Ages 40 to 49
$100,000 Policy$246.60 - $477.60
$250,000 Policy$397.80 - $935.40
$500,000 Policy$687.00 - $1,704.00
$1 Million Policy$1,242.60 - $3,100.80
Female Ages 40 to 49
$100,000 Policy$217.20 - $383.40
$250,000 Policy$331.20 - $715.80
$500,000 Policy$558.00 - $1,267.80
$1 Million Policy$1,021.20 - $2,400

Average Health Smoker

Male Ages 18 to 28
$100,000 Policy$461.90 - $495.00
$250,000 Policy$909.35 - $1,067.05
$500,000 Policy$1,644.40 - $1,954.45
$1 Million Policy$3,216.75 - $3,836.90
Female Ages 18 to 28
$100,000 Policy$345.15 - $387.50
$250,000 Policy$625.25 - $772.45
$500,000 Policy$1,081.10 - $1,442.75
$1 Million Policy$2,090.20 - $2,813.65
Male Ages 29 to 39
$100,000 Policy$507.40 - $874.35
$250,000 Policy$1,121.30 - $1,984.35
$500,000 Policy$2,021.65 - $3,778.70
$1 Million Policy$3,971.15 - $7,485.35
Female Ages 29 to 39
$100,000 Policy$395.76 - $718.20
$250,000 Policy$806.05 - $1,449.50
$500,000 Policy$1,504.83 - $2,745.15
$1 Million Policy$2,937.75 - $5,418.25
Male Ages 40 to 49
$100,000 Policy$954.85 - $1,684.55
$250,000 Policy$2,188.45 - $4,100.55
$500,000 Policy$4,150.85 - $8,124.85
$1 Million Policy$8,229.50 - $16,177.55
Female Ages 40 to 49
$100,000 Policy$777.15 - $1,580.15
$250,000 Policy$1,576.10 - $3,059.15
$500,000 Policy$3,003.50 - $6,036.95
$1 Million Policy$5,934.95 - $12,002.05

Who Sells 30-Year Term Life Insurance?

Some companies specialize in life insurance plans. But not all companies sell 30-year term life insurance.

The fastest and easiest way to find 30-year term life insurance is online. You can get quotes from different life insurance companies simply by entering some basic information.

Independent agents are also a good source for quotes from multiple life insurance companies. They represent you, rather than the insurance company, and can help you find the best rate for your situation.

TIP: You may be able to get 30-year term life insurance through your employer or groups to which you belong. These include auto clubs, professional or trade organizations, or civic associations.

When looking to buy a 30-year term life insurance, keep these tips in mind:

  • Quotes are provided for free. If you are asked to pay for them, look elsewhere.

  • You are not obligated to apply for a policy after receiving a quote. Being pressured to submit an application within 24 hours should raise a red flag.

  • The quote you are given will differ from your actual premium amount. That's because it's not based on complete information.

    You have to fill out an extensive application AND have a medical exam before your actual cost can be determined.

Look into Bundling Options with Your Auto and Home Insurance

Many auto and home insurance companies also offer life insurance. The option is available in one of two ways:

  • Through a subsidiary of the company
  • Through a partnership with a life insurance company

Bundling your insurance needs with one company can save money. Many companies offer multi-policy and loyalty discounts that reduce your premium. Doing business with just one insurance company also offers convenience and familiarity.

Here are some of the top multiple-line insurance companies that offer 30-year term life insurance plans:

Geico Insurance Agency
Their 30-year term life insurance is offered through a third party, Life Quotes, Inc. Throughout the term, your premium amount will not increase.

Once the term ends, you can renew your policy with a new rate based on your age and health or choose another policy.

State Farm Insurance
They offer two types of 30-year term life insurance plans starting at $100,000.

  1. The State Farm Select Term Life
  2. Return of Premium Term Life

Both policies offer a guaranteed benefit and a fixed premium for ages 18 to 45. When the term ends, you have the option to continue on with an annually renewable term policy.

TIP: With both policy options, you receive a discount on your State Farm auto insurance premium.

AAA Life Insurance Company
AAA offers two types of 30-year term life insurance plans:

  1. ExpressTerm Life: You apply online. Coverage options range from $25,000 to $250,000. No medical exam is required and an approval decision is provided with 10 minutes.

    AAA members get the $60 annual policy fee waived. You can apply online.

  2. Traditional Term Life: Coverage options range from $100,000 to $5 million. A medical exam may be required. AAA members receive discounts on their AAA auto and home insurance.

You Should Know: You do not need to be a member of AAA to apply for coverage. Both plans are available for ages 18 to 75.

They have a 30-year term life insurance plan and 30-year term life for the military.

Coverage remains level during the 30 years. The premium amount also remains the same.

After 30 years, coverage remains the same, but premiums increase annually. Active duty military members receive additional benefits.

Bottom Line

30-year term life insurance offers long-term protection that fits within your budget. It's especially beneficial for those who need affordable coverage that lasts through life's big events.

With various riders available to enhance the policy's coverage, 30-year term life insurance can help you plan for unexpected circumstances in the future. This will allow you to handle life's other major expenses, like a home, a family, and retirement.

Write to Maryellen Cicione at feedback@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.

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