Personal Finance

I'm Almost 40 and Looking for Life Insurance. What's a Good Option?

Maurie Backman

Published: February 5, 2025 2:19 pm

One of the most important purchases you might make in your lifetime is a life insurance policy. With life insurance, you can leave your loved ones with a sum of money in the event of your passing. And the younger you are when you buy life insurance, the more affordable it might be.

In this Reddit post, a 38-year-old is wondering what type of life insurance to. They have two very young children they’re looking to protect.

I’m glad this poster is thinking about life insurance while their kids are young, because even if they have a working spouse, their family could end up in serious financial trouble without their income, which happens to be about $250,000 a year. But I’d also caution this poster to think carefully about the specific type of life insurance they buy.

Why term life insurance may be your best bet

A lot of people like the idea of getting something out of their life insurance even if they don’t pass away at an earlier age than expected. Folks in that boat commonly opt for whole life insurance, which accumulates a cash value.

Term life insurance, on the other hand, doesn’t offer any financial benefit if the person being covered doesn’t pass away during their coverage period. There’s no cash value accumulated with a term life policy.

But term life insurance offers one big advantage over whole life insurance — a far more affordable cost. And so in this situation, I’d tell the poster to get term life insurance for a couple of reasons.

First, they need a pretty large policy, which could be expensive to begin with. A good rule of thumb is secure enough life insurance to replace your income 10 times over. Since the poster makes $250,000 a year, they’re looking at $2.5 million in coverage.

And sure, they could buy less coverage, but that’s not optimal. So the cost savings of term life insurance versus whole life could be substantial.

Also, some people look at whole life insurance as an investment since it accumulates a cash value over time. But you know what else makes a good investment? Investments.

What I mean by this is that instead of paying more money for whole life insurance, you can buy cheaper term life insurance and invest the money you’re not spending on higher premiums. That way, you can control your investments — not an insurance company.

Additionally, if this poster buys a 20-year term life policy, it basically get them to when their kids reach young adulthood. At that point, they can conceivably support themselves. They could also buy a 25-year policy if they want a few more years of coverage.

Ask a financial advisor for a recommendation

Choosing the right life insurance is important. So if you’re in a similar situation to the poster above, I’d suggest meeting with a financial advisor and seeing what they suggest.

A financial advisor can make recommendations about life insurance based on your specific needs, goals, and circumstances. And they may be able to offer tips on how to lower your costs, so it’s a worthwhile conversation to have.

That said, I’d encourage anyone with a family to support to start looking into life insurance as soon as possible. The fact that the poster above is 38 means their health may still be optimal, leading to lower premiums. But the longer you wait, the more risk you take in terms of getting stuck with higher costs.