Companies that offer life insurance. Buying life insurance as a 45-year-old, Find the best rates

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You’ve worked so hard — now it’s time to protect your family and plan for their future.

By the time you’re 45 years old, you’re probably in your financial prime. Your career is established, and you’re building your net worth. You may have assets to protect or a business. At the same time, you may have a family or loved ones you’re looking after — and that’s where a life insurance policy comes into play.

Much like building up a 401k or IRA gives you a financial cushion for your future, life insurance does the same for your family and anyone you leave behind should you die. At 45 years old, you’re not only young enough to access an affordable life insurance policy, but you’re also likely in a good position to buy the coverage that suits your needs, whether it’s simply to cover your debt, set your kids up for college or leave a lasting financial legacy.

People get life insurance for different reasons. Here’s the lowdown on purchasing a policy at age 45.

Life insurance companies for 45-year-olds

Which is the cheapest life insurance provider for 45-year-olds?

Our research indicates that the cheapest life insurance rates on a $500,000 [term life] policy for a 45-year-old man who doesn’t smoke could be from Banner Life and William Penn at $49.36 a month. Like with most life insurance policies, the rates for a smoker are higher. Banner Life and William Penn are still inexpensive at $209.75 per month.

If you’re a 45-year-old woman who is a nonsmoker, budget-friendly options are Protective Life, Banner Life and William Penn with a tie at $38.70 per month. For a smoker, the best rates still tend to be from Banner Life and William Penn at $152.99 per month.

Costs of a 20-year, $500,000 term life policy for a 45-year-old in perfect health

What is my risk of dying in the next five years?

A typical, healthy 45-year-old has a long life ahead of them. According to life expectancy data, a woman’s, risk of dying in the next five years is 1.21%. For a man, the figure climbs slightly to 1.88%.

To put this into context, let’s look at the average life expectancy in the US. A man who reaches 65 can expect to live until age 84.3, and a woman is likely to live until the age of 86.6. Of course, these are averages; about a quarter of 65-year-olds live past age 90.

While life insurance underwriters do take your age into account when determining your rates, a healthy 45-year-old is not deemed too risky to insure. As you compare life insurance policies, you’ll see that people in this age group can still access low premiums.

Trip insurance

Odds of dying for a 45-year-old

What is the typical cost of life insurance for 45-year-olds?

Life insurance is a personal decision. Every policy is unique and is a product of factors like your age, health, family history, occupation and hobbies. The 40 to 45 age bracket is a popular time to shop around for life insurance likely due to financial interests and the need to protect a family — and you’re still young enough to qualify for coverage and preferred rates.

According to our research, the typical cost for $500,000 of coverage in a 20-year term policy for a man in perfect health is $51.50. Over 20 years, this adds up to $12,360.17, with an expected value of $74,393.29.

For a woman, the average cost for the same policy is $42. Over 20 years, this adds up to $10,080, with an expected value of $46,681.12.

What is the best life insurance policy for 45-year-olds?

The policy you choose really depends on your situation and financial goals. To figure it out, start by thinking about what you will be using your policy for. Are you purchasing life insurance to cover your mortgage, debt or children’s college expenses? Are you hoping to supplement your income? Are you buying it to help your family to pay for basic expenses when you’re gone, or do you want to leave a sizeable legacy?

Your answers to these questions will help you to determine the type and amount of coverage you need.

Most people in their 40s choose a term policy with the option to convert to a permanent policy later. There are a few reasons for this. First, term life insurance is less expensive, and it offers peace of mind and protection for your family should something happen to you. Second, it usually lasts for 10, 20 or 30 years, so you can decide how long you need coverage. For example, if you’re aiming to pay off your debts, you’ll need a policy that lasts until you’re in the clear. If you’re buying life insurance to supplement your income, you’ll need a policy that will last until you retire.

Life insurance is a form of financial planning. Many people who are 45 opt for a term policy, while continuing to contribute to their 401ks, IRAs and 529 plans. This kind of mix offers a sense of security while building up a comfortable nest egg.

A convertible term policy gives you flexibility in the future, so if you need the insurance longer than you thought or you want to switch to a policy that accumulates cash value, upgrade to a permanent policy. Most term policies come with the option to convert before the policy ends or by age 70. And in most cases, you can convert your insurance at the rate class you originally qualified at.

Which company is best for term life insurance

If you’re confident you’ll need lifelong protection, or you’re interested in making your life insurance policy a bigger part of your financial plan, it might be worth looking into a permanent policy — or a combination of the two.

How do I calculate my life insurance needs?

To work out how much life insurance to buy, assess everything you pay for now and everything you can expect to pay for in the future. Unless you have enough savings to protect your family from financial burden, consider the dollar figure that covers your beneficiaries and one you can afford. Remember, if you don’t pay your premiums, your policy will lapse.

Existing debt. Maybe you have a mortgage or a car loan or still paying off your student loans. If you die with unpaid debt, it’s transferred to your survivors like your parents, partner or kids. To prevent that from happening, leave enough to cover that debt.

College plans. Are your kids planning to go to college? That’s great — but it’s also a huge expense. When you’re calculating how much life insurance you need, factor in the cost of college.

End-of-life expenses. It’s morbid to think about, but the fact is, funerals are expensive. Many life insurance policyholders put aside some money to cover their funeral and burial costs, so their family doesn’t have to deal with those finances while they’re grieving.

Marriage and children. Whether it’s your first or your fifth, marriage comes with monetary obligations, such as the wedding, rent, car payments and mortgage. And if you have, or are hoping to have children, that’s another financial responsibility. Your life insurance should provide your spouse and/or kids with the income they need to survive.

Care. At this stage of your life, you may be looking after a parent who’s in a nursing home or covering some medical expenses. If that’s the case, consider this cost when working out your life insurance needs.

Financial safety net. Protection is one thing, and helping your family to maintain their lifestyle is another. To ensure your family has enough money to not just survive, but thrive, you may want to add “cushion coverage.” This also ties into leaving a legacy.

Individual life insurance plans

Business ownership. Do you have a business, or are you hoping to start one? A life insurance policy can give the company a sense of security.

Things change, so be sure to review your life insurance coverage every few years. And if you’ve gotten married or divorced, received an inheritance, bought a new home or became a grandparent, it’s a good idea to re-evaluate your policy right away.

Case study

Weighing if it’s worth splurging on a higher level of protection? When you’re in your mid-40s, chances are it won’t be too much of a price difference.

Let’s look at a 45-year-old woman who is a non-smoker. Our research shows a $250,000 policy with Banner Life and William Penn, among the cheapest providers, will set her back just $22.57 per month. If she wants to increase that coverage to $500,000, those providers plus Protective Life will charge $35.60 per month. That’s less than $15 a month for double the protection.

Bottom line

As a 45-year-old, you may be a breadwinner, business owner or someone with financial assets to protect, so buying life insurance is a smart move. Most people in their mid-40s opt for a term life insurance policy that will take them up to their retirement — usually 20 or 30 years. If you’re in good health, you can typically lock in a pretty low premium for a quarter- or half-million dollars in coverage.

There’s nothing more personal than life insurance. When you’re planning for the future, compare life insurance policies to find one that fits your needs.

Frequently asked questions