Here's What Happens if You Don't Buy Life Insurance Until Your 40s

If there are people in your life who depend on you financially, then it's important to put a life insurance policy in place. Leaving your loved ones with a benefit to cover their expenses could spell the difference between them struggling financially in your absence or not.

Generally speaking, the younger you are when you apply for life insurance, the less you'll spend on your premiums. So if you don't apply for life insurance until your 40s, it may end up costing you more than expected.

Why life insurance might cost more in your 40s

There are different factors that life insurance companies consider when calculating premium rates, such as your health and your line of work. Generally speaking, the greater the chances of your insurer having to pay out on your policy, the more you can expect to pay for it.

As such, if you're a smoker or have health conditions that might shorten your lifespan, those things will be reflected in your premium rates. And if your line of work happens to be dangerous -- say, you're a firefighter -- then that, too, could drive the cost of life insurance upward for you.

The reason you might pay more for life insurance in your 40s instead of your 30s or 20s is that the older you are, the more likely you might be to pass away while your policy is still in place. That's a risk your insurer will account for by charging you more.

How much more will you pay for life insurance if you first apply in your 40s?

There's no hard and fast rule when it comes to applying for life insurance a bit later in life. Some companies might charge you X amount for being an older applicant while others might charge you Y. And remember, it's not just your age going into that calculation, but rather, the sum total of all of your different risk factors.

That said, according to Dave Ramsey, if you're a non-smoker looking for $1 million in coverage, you can expect to pay $54 a month for a 20-year term life insurance policy at age 30 and $84 a month at age 40. So all told, you're looking at an extra $30 a month, or $360 a year.

This is just one set of calculations. The point, however, is that you should expect to pay more for life insurance due to your age if you're applying in your 40s.

Does it ever pay to wait until your 40s to get life insurance?

It may be that you didn't get married or have children until your 40s, and you therefore didn't have a need for life insurance before then. In circumstances like that, waiting until your 40s makes sense.

However, one thing you don't want to do is wait years to get life insurance because you're worried about the premium costs when your need for coverage arises earlier. In doing so, you might not only drive the cost of your policy up, but also, put your loved ones at risk of financial struggles in the event that something happens to you before you've managed to secure coverage.