For many people who are young and in good health, finding life insurance coverage is typically not difficult. In many cases, it is as easy as choosing the amount of protection that is needed, applying for a policy, passing the necessary medical exam, and waiting for the underwriter’s approval.
Once you have reached the age of 50, your options for life insurance are often different than in years past. As most people may expect, our health tends to decline the older that we get – and with life insurance, both age and health are two of the key determining factors that are reviewed by the underwriters when determining whether or not an applicant for coverage will qualify.Many who have severe health issues may have to look into the option of no medical exam life insurance.
Regardless of your age or health, it’s important that you get the insurance coverage that your family will need.
Have you been declined for life insurance in the past? You may assume that you won’t be able to get affordable coverage, but that’s why we suggest that you look into a no medical exam plan to get your life insurance protection.
Each time an individual applies for life insurance coverage, the underlying insurer is essentially taking a risk on whether or not it will be required to pay out a claim – and if the insurance carrier feels that the risk is too great, it will either charge the insured a higher rate of premium or it will deny the applicant for coverage altogether.
The good news is that people over 50 in the market for life insurance still have plenty of options – you just need to know where to look. The best way to locate the coverage that can best fit your specific needs, while at the same time staying within your budget, is to work with an expert in the field.
If he is healthy, a man aged 50 can pay as little as less than $15 a month for $100,000 in life insurance. A healthy 59-year-old can pay as little as $27 a month for the same. Even at 59, a $400,000 policy can cost less than $100 a month. These are non-smoker rates for a 10-year term policy.
If you have health conditions like cancer, heart disease or diabetes while looking for life insurance, you can expect increased rates. Smoking will also increase the rates for life insurance for ages 50 to 59.
Do People Over Age 50 Still Need Life Insurance?
You may have heard that those who are over age 50 don’t need life insurance and that this type of coverage is usually only for those who have young children who are depending on their income. In many cases, those who are age 50 or over actually end up canceling their life insurance coverage. But this could turn out to be a very big mistake.
The truth is that people of any age can need life insurance – including those who are over 50. Although your children may be grown and are no longer depending on your income for their living expenses and needs, there are numerous other reasons for having – or for keeping – this essential financial protection. Just some of these reasons can include:
- Final Expenses – Regardless of what age you are, a funeral can be expensive. Today, the average cost of final expenses can actually exceed $10,000 when factoring in items such as the funeral service, burial plot, headstone, transportation, flowers, casket or urn, and other miscellaneous items. If there are final medical and hospice costs that are also incurred, this could add significantly to the total.
- Estate Taxes – Estate taxes are another potential area of concern for those who are over age 50. For those who are faced with having to pay estate tax upon death, this liability can erode up to 50% or more of a decedent’s assets. If there is no plan in place, such as life insurance proceeds, for paying these taxes, survivors could end up selling off other assets such as retirement investments or even precious family heirlooms in order to come up with the cash that is needed. And unfortunately, when such assets are sold in this manner, they are often done so at far below market value.
- Pension / Retirement Income Replacement – In many cases, when a retiree dies, his or her pension income goes away – or is drastically reduced. This can leave their spouse in a terrible position in terms of income when this happens – especially if there is no other plan in place for replacing that lost income amount. Imagine if your spouse’s income were to be immediately cut in half – or worse – immediately upon your death. Having a life insurance policy in place can help to quickly replace this lost income from a pension or other type of retirement plan.
- Business Succession – Life insurance can help business owners who are over age 50 to use as a business succession tool. Proceeds from a life insurance policy could be used to keep a company running while a replacement owner or partner is located, or while a suitable buyer for the business is found.
It will also add a liquid asset to your estate to help your beneficiaries with the estate taxes. It provides you with an easy way to leave an inheritance behind for your family. And, it can provide you with a way to fund a trust.
- Savings – In addition to all of the other uses of life insurance for those who are over age 50, a permanent life insurance policy can also be used for the simple purpose of supplementing one’s savings. For instance, a whole life insurance policy can help you to build up cash on a tax-deferred basis that can be drawn upon in the future in a number of different ways. Unlike money that is invested in the unpredictable stock market, funds that are inside of the cash value of a whole life insurance are provided with a guaranteed rate of growth. In addition, because of their tax-deferred nature, funds are allowed to compound over time, with no tax due on the gain until the time they are withdrawn in the future. This can provide not just safety, but also peace of mind in knowing that the principal is protected – regardless of what is happening in the market, as well as in the economy overall. In addition, the death benefit on these life insurance plans is also income tax-free to the named beneficiary (or beneficiaries). This means the money can be used by survivors for their financial needs – without having to hand over a portion of it to Uncle Sam.
I recently had a husband and wife that turned 50 years old and were seeking 20 year $500k term policies. For whatever reason, they had only taken out 10 year policies when they turned 40. Realizing their mistake, they are now looking to locking it in much longer.
Which Type Of Coverage Is Best?
When seeking life insurance over 50, a big question that comes to mind is which type of coverage will be best. There are two primary categories of life insurance coverage to choose from. These are term and permanent policies.
With a term policy, you are purchasing basic “no frills” coverage. This means that you are obtaining pure death benefit coverage without any cash value or savings component. Because of this, the premium that is charged for term life insurance is typically less than that of a comparable permanent life insurance plan. There is, however, one caveat.
Term life insurance, as its name implies, is sold for a certain length of time – or “term.” This means that the policy will cover you for only a certain period, and then it will expire. Most term policies are sold for five years, 10, years, 15 years, 20 years, or 30 years. In some limited cases, you may even be able to obtain a 40-year term policy – depending on your age and health condition at the time of application.
Even though the coverage on a cheap term life insurance policy runs out after a given period, these policies can be beneficial in certain situations. For example, term policies are often considered for “temporary” needs such as providing protection during the length of a 15 or a 30-year mortgage balance. In other words, if an individual wanted to make sure that the balance of their home mortgage was paid off for his or her survivors in the event of death, they could purchase a term life policy for the same length of time in which they will have a remaining mortgage balance. When the mortgage balance is paid off, the term insurance policy will expire.
If a term life insurance policyholder wishes to continue their coverage upon the policy’s expiration, they will need to re-apply at their current age and health condition. This will typically mean that the premium amount for the new coverage will be higher – even if the face amount of the policy remains the same. For many people this is no problem because the premiums on term policies are so much less expensive than the other options.
If you don’t like the idea of your life insurance expiring, then go with a whole life insurance plan. They never expire, but they are more expensive.
The money that is in a permanent life insurance policy’s cash value component may be borrowed or withdrawn by the policyholder for any need that he or she sees fit. This can provide the policyholder with additional funds for the down payment on a home, the purchase of a car, the payoff of debt, or even for supplemental retirement income in the future.
Although the premium that is charged on a permanent life insurance policy will usually start out higher than that of a comparable term life insurance plan, the amount of the premium on a permanent policy will typically be locked in for life. This means that the policyholder will not need to worry about his or her premiums increasing in the future – even if they incur adverse health conditions.
How And Where To Find A Policy?
When working with only one insurer, you are locked into just that insurance company’s underwriting requirements – as well as that insurer’s prices. And, while it may sound strange, not all life insurance coverage is underwritten or priced identically.
For example, an applicant who applies to one insurance company may be accepted as a Standard policyholder and charged an average premium rate, while he or she may be accepted only as a Substandard policyholder at another carrier and charged a higher rate of premium – even though they submitted the same answers to the questions on the application for coverage.
This is why is it essential to work with an expert in the insurance field that can submit your information to numerous insurance carriers. Just like when shopping for any other important item – it’s always best to compare prior to making your final determination.
This is where we come in. When shopping for the important insurance, we can help you compare dozens of plans and companies in a matter of minutes. We can bring you 50 companies’ plans and their rates. It makes it easier to make a decision when you can compare plans side-by-side.
When you are in the market for life insurance for ages 50 to 59, don’t wait to apply. The rates go up with each year of your age, and the difference between the rates available at 50 and the ones available at 59 are substantial. You also take the chance that your health will change, making you eligible for much less favorable rates. You shouldn’t wait any longer to apply for a plan.
If you are looking for answers about life insurance over a specific age in your 50’s then check out our individual pages on for the different ages:
No matter what age you are in your 50’s, we can definitely get a policy that meets your needs. We know that planning for your death is not a fun task, but it’s one of the most important things that you can do. You don’t want to leave your family your final expenses.