Life Insurance for People Over 50
Although finding the best life insurance when you’re over 50 may be challenging, the truth of the matter is it’s rather easy and affordable.
Sure, you may be dealing with some health issues and maybe you’re turned off by the waiting periods the TV companies advertise, but once you know your options things get much easier.
And if you choose a resource like LifeInsure.com to help you shop your policy, you’ll be left wondering what all the fuss was about.
Do People over 50 Need Life Insurance?
To be perfectly honest, not everyone who is over 50 needs life insurance. However, when you die there will be expenses for a funeral, cremation, or burial but if you’ve got the money tucked away to cover those expenses (about $15,000) you may want to forgo paying for life insurance.
Realistically, however, there are a whole lot of people over 50 who shop for and then buy life insurance every year. In fact, life insurance for seniors is one of the most popular categories in the life insurance industry. Why is that?
We have found over the years that people who buy life insurance in their 50s, 60s, and 70s, do so because they have found that they are either uninsured or underinsured for various reasons:
- Often, people over 50 find out after attending a funeral or helping to pay for one discover that funerals are now costing more than $10,000.
- Many folks who are 50 plus, find out (typically by accident) that their life insurance at work is not portable. This means when they leave, their life insurance doesn’t follow.
- Others realize that their term life insurance is about to expire and they cannot afford the renewal premium and are likely not aware of the conversion privilege.
- As a result of the market crash in 2008, many 35 and 40-year-olds either dropped or cashed in their life insurance for financial reasons and have put off replacing it because of pricing or medical issues that prevent them from qualifying for traditional coverage.
In most cases, these folks almost panic when they get into their 50s and realize that their surviving loved ones may be the ones who have to be out-of-pocket to take care of final expenses.
When People May Not Need Life Insurance in their 50s
To determine if you need life insurance in your 50s, you should consider the preceding subtopic and then consider how much life insurance (if any) you have now.
Consider the following questions and circumstances to understand the financial position you’re in and whether or not purchasing life insurance makes sense for you.
- If you currently have life insurance, did you consider the cost of your final expenses when you purchased it?
- If you currently have term life insurance, have you checked with your agent or insurance company to see what your renewal quote will be at the end of the term?
- If your current policy is a term policy, does the company offer conversion to a permanent policy, and if so, what will be the new cost of the permanent policy?
- If you purchase a pre-need policy from a funeral home, have you moved, and if so, can that policy be transferred to a funeral home in your new area?
- If you have the funds on hand to cover final expenses, will those funds be accessible to a friend or relative who has agreed to handle your funeral arrangements?
If you answered yes to most or all of the above-mentioned questions, you may not even need a new policy.
Why Life Insurance is More Expensive Over 50?
The simple answer here is you’re over age 50. It is certainly no secret that life insurance rates are based primarily on age and health. Knowing this, if you compare a 41-year-old with a 51-year-old, the 51-year-old is going to generally represent a higher risk to the insurance company versus the 41-year-old.
For example, the Social Security Administration reports that a 41-year-old male has a life expectancy of 37.65 years versus the life expectancy of a 51-year-old male of 28.82 years. This means that a life insurance company has significantly less amount of time to collect insurance premiums from the 51-year-old than from the 41-year-old.
Moreover, 50-year-olds tend to be less healthy than 40-year-olds, which drives the premium up substantially. Additionally, since women tend to outlive men, their life insurance rates are generally lower since a woman’s life expectancy in their 50s is typically 5 years longer than a man’s life expectancy.
What to Look for in the Best Life Insurance for People Over 50
This topic doesn’t change because of the age you are when shopping for life insurance. The best life insurance coverage for a 50-year-old is the same at any age, meaning, your best life insurance policy should be based on your needs and your budget.
There are two primary types of life insurance, temporary (term life insurance) and permanent (universal life or whole life).
Since term life insurance is temporary coverage and builds no cash value, it is more suited for applicants who believe their life insurance needs will go down over time and prefer the most inexpensive coverage available.
If, however, you prefer to have a policy in place that will offer coverage for a lifetime, and you want to build cash value over time (an asset) that you can access if a financial emergency arises, whole life or universal life will likely be the better choice even though the monthly rates will be significantly higher.
When you are shopping for life insurance, it’s best to know what features and benefits you need for your particular circumstances. Both term and permanent insurance policies can be customized to meet your needs using optional riders that most companies offer.
For example, if you are concerned about having funds available to cover long-term care expenses, term insurance, whole life, and universal life insurance will offer an accelerated death benefit rider that allows you to draw a percentage of your policy’s death benefit to cover long-term care expenses.
Additionally, you may want to add your children or spouse to the policy to make certain the entire family is covered.
Some policies even offer a rider that will allow the applicant to purchase additional life insurance in the future without the need for medical underwriting.
When you speak with an insurance professional, be sure to inquire about additional benefits you may be entitled to other than the death benefit.
We would all like to believe that every life insurance company offers outstanding customer service (and most companies do) but some companies are more service-oriented than others.
Claims service is most important and we, as your agent of record will get involved if you believe you’re not getting satisfactory claims service. As an independent insurance brokerage, we represent many carriers who offer outstanding claims service and customer service.
Since life insurance is a promise to pay a benefit in exchange for your premium, LifeInsure.com only represents highly-rated insurance companies that have demonstrated over time that they will have the financial ability to keep their promise to pay a claim for decades if needed.
Life insurance is the most affordable solution for making certain that your financial dependents or special needs children will have the financial resources they need if you’re no longer in the picture.
In cases where there is a married couple with special needs children, we generally recommend a survivorship policy that pays when the second person dies so that a special needs child will be taken care of financially.
How Much Do You Need?
The amount of life insurance you purchase is a critical part of the shopping process. As we mentioned earlier in the article, the amount of life insurance you need will depend on the various financial risks that you want to cover.
This is when an experienced independent insurance agent will help you drill down into your financial risks, determine your financial risks, and then offer a plan to mitigate those risks at a price that will fit your budget.
Are there Medical Exam Requirements?
With 21st Century innovative technology, many insurance companies have dropped the traditional requirement for a life insurance medical exam.
Not only are the exams costly for the insurance company, but these exams also tend to slow down the underwriting process. And, many insurance applicants refuse to undergo a medical exam for various reasons (especially now, with the Coronavirus pandemic).
Currently, more and more companies are charging about the same for no exam and fully underwritten life insurance policies because dropping the exam requirement saves the company time and money when issuing a policy.
Life Insurance Policy Types for People Over 50?
Most people who are in their 50s, 60s, and 70s, have similar life insurance needs but there are more differences than similarities. Knowing this, independent agents and the companies they represent provide many types of policies that will best meet the needs of every applicant.
Term Life Insurance
Since term insurance is not considered lifetime coverage, the mortality rates for term policies are much lower than permanent insurance policies and therefore much cheaper for the applicant.
In fact, a 30-year-old make can generally purchase a $500,000 20-year-term policy for a monthly payment that’s about the same as a large pizza.
Universal Life Insurance
People who choose Universal Life Insurance are generally applicants looking for lifetime coverage but also choose to build an asset while paying their premiums.
With Universal Life Insurance, the policyholder can accumulate wealth over time and then access that wealth through policy loans for any reason without regard to credit history, The company’s loan to the policyholder is secured by the cash value of the policy but the cash continues to earn interest that is generally based on the performance of investments made by the insurance company.
Additionally, Universal Life insurance is the only type of life insurance that is considered flexible. This means that the policyholder can adjust their monthly premium or the death benefit of the policy to accommodate life events.
Whole Life Insurance
Whole Life Insurance is similar to term insurance in that once the policy is issued, the death benefit or monthly premium can never be increased by the insurance company.
The difference between whole life and term insurance is that whole life builds cash value over time, provides lifetime coverage, and costs quite a bit more than term insurance.
Whole Life Insurance is generally a popular choice for any prospective client looking to accumulate wealth based on guaranteed interest rates rather than accepting the risks inherent with traditional investing.
Final Expense Life Insurance
Simply put, a final expense life insurance is a purpose for purchasing whole life insurance. This means that a whole life policy is purchased specifically to cover the final expenses of the policyholder when they die.
Final expenses are generally funeral and burial expenses, unpaid medical bills, and outstanding nursing home expenses that are not covered by health insurance.
Life Insurance with No Medical Exam
These policies can be term, whole life, or universal life where the insurance company offers coverage without a medical exam requirement. They are generally offered to healthy individuals and are not a method to purchase low-cost life insurance since a medical exam is only part of the medical underwriting process.
Generally, a life insurance exam is never required by companies who offer final expense insurance for seniors, and companies that offer no exam term insurance generally cap the death benefit at $1 million.
Best Life Insurance Rates for People Over 50
Although there are hundreds of life insurance companies that offer life insurance to people over 50, we have found over time that there are typically five companies that always rise to the top.
Here are the best Term Insurance rates for People over 50
Actual rates for a healthy male and female non-smoker for a $250,000 10-year Policy
|Age of Applicant||Male Non-Smoker||Female Non-Smoker|
Here are the best Final Expense Insurance rates for People over 50
Actual rates for a healthy male and female non-smoker for a $25,000 Final Expense Policy
Age of Applicant Male Non-Smoker Female Non-Smoker
50 $69.33 $56.98
55 $85.06 $64.46
60 $104.60 $77.36
65 $132.92 $97.72
70 $171.94 $125.08
Here are the best Universal Life Insurance rates for People over 50
Actual rates for a healthy male and female non-smoker for a $50,000 Universal Life Policy
Age of Applicant Male Non-Smoker Female Non-Smoker
50 $68.38 $55.74
55 $82.32 $65.97
60 $99.85 $83.65
65 $130.85 $109.43
70 $172.14 $146.10
All rates provided are subject to company underwriting. For accurate rates for your actual age, please use our instant insurance raters on the right side of the page.
How to Get Life Insurance Once You Turn 50
The need to call several life insurance companies for life insurance quotes is certainly a thing of the past. With today’s technology, an experienced and reputable independent broker can deliver instant quotes from a dozen companies.
Choosing the right independent broker is as important as choosing the right insurance company.
Make sure the broker you select does not represent only one or two carriers, make sure they are licensed across the country, and make very sure they represent the majority of the highly-rated insurance companies that specialize in your niche (life insurance for people over 50).
Frequently Asked Questions
Question: Is it too late to get life insurance after you turn 50?
Answer: Absolutely not. Most independent agents represent insurance carriers that will offer life insurance to people in their mid-80s.
Question: Is life insurance worth it for people over 50?
Answer: Because of intense competition between insurance companies, life insurance today has never been cheaper In almost every case, purchasing life insurance is the most affordable method of mitigating a financial risk; whether you are 30 or 60.
Question: What other types of Insurance Should People Over 50 Consider?
Answer: If you are a homeowner, we recommend that you consider mortgage protection life insurance which is designed to pay off your mortgage when you die. If you own a business, we recommend business continuation insurance like key person insurance and buy-sell agreement insurance.
Question: What is the most affordable life insurance policy for people over 50?
Answer: For people over 50 in good health, term life insurance will generally be the most affordable life insurance in terms of a monthly premium.
In my 20+ years as an independent life and disability insurance broker, I have personally assisted thousands of clients with their life and disability insurance needs. Being independent, I represent many highly-rated insurance companies and, because I am not beholden to any one insurance company, my focus is to find the right company and policy for each individual client. I believe that when people shop for insurance (or anything else, for that matter) on the Internet, they are looking for a simple, non-intrusive, non-pressure method of doing so. I strive to treat my prospective clients with the utmost respect and I believe an educated prospect can make the right decision without sales pressure. Please feel free to contact me at your convenience.