At 53 years old, there are many reasons why you would still need life insurance.
You might want to pay for estate taxes, prepare money for home care, give your children an inheritance, replace lost income, or cover your burial expenses.
Reasons for Purchasing Life Insurance
According to a consumer survey, there are many reasons why people in their 50’s are purchasing life insurance policies, both major and minor reasons.
These are listed below:
| Major reason (listed in percentages) | Minor reason | |
|---|---|---|
| To cover burial or final expenses | 51 | 33 |
| To replace lost income | 34 | 24 |
| To pay off a mortgage | 26 | 17 |
| To provide an inheritance | 24 | 34 |
| To pay for home care | 17 | 20 |
| To supplement retirement income | 14 | 28 |
| To pay for estate taxes | 14 | 27 |
| As a tax advantage and way to save money | 8 | 23 |
| Something a parent or relative bought for me | 8 | 8 |
| To provide money for education | 9 | 14 |
| For business reasons | 5 | 10 |
| To make a charitable donation | 4 | 11 |
Best Life Insurance Policies for 53 Year Olds
There are three policy types you can select:
Permanent Life Insurance
These policies are permanent and cannot be canceled so long as you pay the premiums. Many people use these for their cash value options because they can generate extra money for you that you can use before your passing. This policy is designed to replace income and pay off all debts.
Term Life Insurance
The term length covers you for a specific amount of time between 10 years and 30 years. The amount you pay is level, or fixed, for the entire term. These policies should be used for temporary income, typically to pay off existing debt.
Burial Life Insurance
This covers your final expenses, those relating to your burial or funeral. You get guaranteed approval in some cases and no medical exams required. The rates are less expensive than the other two options because you have lower coverage amounts.
The best option is the one that fits with your needs best. If you only want to provide enough money for final expenses, then the third option is the “best” because it is affordable and gives you the coverage you want.
If you have a mark on your record or a health concern that might rule you out of affordable term or permanent plans, then burial might be the only remaining “exam free” option you have.
Should you wish to provide money to replace your income forever after your passing, a permanent plan is better.
If you are just frugal and want to get a rate now, based on your 53 year old health without ever having to deal with changing rates or converting a term plan later, then a level permanent policy is best.
Term Life Insurance
Term plans are good solutions for those who might not qualify for a permanent plan, or who want coverage that is short lived. If, for example, you do not need to provide income to your family forever, but just enough that your spouse could continue to care for themselves and your kids if you passed away unexpectedly, then a term plan is best.
If you have a mortgage that you got at 35 and still has 5 years left, a shorter, 10 year term plan might suffice in providing enough coverage for situations where you pass away and your loved ones are left holding the bill.
Permanent Life Insurance
As someone in your 50’s you can take advantage of some riders that permanent policies have to offer if you are looking for investment opportunities associated with your policy.
For example, you can make a withdrawal for any amount that you want from the cash value generated by your permanent plan. And when you take money out you get your premium payments back without paying any taxes on them.
If, however, you take out more money through your cash value than you paid into your policy through premiums, those gains do become taxed as income. But, since life insurance is not a retirement plan you will not be charged an extra penalty if you take your money out early from the IRS.
The best part is unlike retirement plans, again, you can take cash out at any age. So no matter how old you are, if you start investing now in a permanent policy on which cash value is gain, you can have that cash value to withdrawal at any time that you need it, rest assured that the whole value of your policy without that cash value is adequate to cover any final expenses. This is a much better option tax-wise than other ways of getting cash.
Which Type Of Insurance Is Best For 53 Year Olds
This is an ideal solution for those who are older, nearing retirement, who might discover that their retirement needs to be supplemented in a few years. Having a permanent policy can provide that safety net if needed.
Life insurance policies also let you take money out through a policy loan and you don’t owe taxes on this as long as you don’t end your contract that loan is never taxed.
This gives you a way to spend any investment money that you made without having to give it away to the government. And, when you pass away, your loan gets paid out of the death benefit that you have.
Now again, the downside here is that if you cash out with a loan early on that money is taken from your death benefit so it won’t be there to cover any final expenses or remaining debt.
But, if you don’t need to create any type of inheritance or your needs have changed yet again and you don’t need to have an extra $50,000 or $100,000 to pay off a mortgage, you can take out a loan tax free and simply use that money in another way knowing that it won’t be there if you pass away but neither will the need.
Life Insurance Rates for 53 Year Olds
These are policy examples based on applicants who reside in California and do not have serious health conditions. Applicants are non-smokers.
| Coverage Amount/ Policy Type | Monthly premium | Coverage Amount/ Policy Type | Monthly premium | Coverage Amount/ Policy Type | Monthly premium |
|---|---|---|---|---|---|
| $500,000/ 10 Year Term | $41 | $1,000,000/ 10 Year Term | $76 | $5,000,000/ 10 Year Term | $368 |
| $500,000/ 15 Year Term | $51 | $1,000,000/ 15 Year Term | $96 | $5,000,000/ 15 Year Term | $458 |
| $500,000/ 20 Year Term | $73 | $1,000,000/ 20 Year Term | $136 | $5,000,000/ 20 Year Term | $660 |
| $500,000/ 25 Year Term | $111 | $1,000,000/ 25 Year Term | $207 | $5,000,000/ 25 Year Term | $1,018 |
| $500,000/ 30 Year Term | $141 | $1,000,000/ 30 Year Term | $263 | $5,000,000/ 30 Year Term | $1,294 |
| Whole Life Insurance | $561 | Whole Life Insurance | $1,056 | Whole Life Insurance | $5,038 |
Tips to Get the Best Life Insurance Rates
It is important that you work with an independent agent or broker to determine which options are best suited for you. For example, if you wanted to avoid a medical examination companies like American National and Transamerica are great for what they offer fifty-three-year-old, but they would take much longer to approve compared to companies like Fidelity or Sagicor.
This does not mean that one company is better than the other but if time is a factor it is something you will want to review. The reason it takes longer is because in spite of not requiring a medical exam, these companies will still request your records from your primary care physician which can take between three and four weeks.
So again, if you need a policy quickly right before you apply for a loan and you need collateral or right before you get on a plane, you will want a company that offers faster approval.
Best Life Insurance Companies for 53 Year Olds
Men and women who are 53 can find the cheapest rates and best term coverage policies with these top companies:
| Company | A.M. Best Rating | Policies |
|---|---|---|
| Protective Life | A+ Superior |
|
| Transamerica | A+ Superior |
|
| Prudential Financial | A+ Superior |
|
| Banner Life | A+ Superior |
|
Out of those, two main contenders are as follows:
Transamerica Life Insurance
Transamerica is a top contender for those with any health issues or who are smokers. Transamerica has a range of term and permanent policies alongside their burial insurance and accidental death policies.
For term, they have two types of policies both of which supply coverage up to $1 million. The terms available range between 5 and 30 years. The difference between the two is that the Trendsetter LB provides access to money before you die if you are diagnosed with a terminal, critical, or chronic illness.
Their permanent policies are available in amounts between $2,000 and $50,000. Their variable options have cash value growth tied to the performance of investments.
Protective Life Insurance
Protective has some of the lowest price policies and they are well known for the Custom Choice plan which allows customers to pay a level premium for their term coverage and at the end of that term they can continue with the same premium in spite of old age.
The coverage amount drops at this point, but it means that you can continue your coverage after your term plan expires without having to renew a policy, apply again, or undergo a medical exam.
Learn more by reading our Protective Life Insurance Review.
How to Find the Best Life Insurance Rates for 53 Year Olds
When it comes to finding the best life insurance coverage for 53 year olds, you want to be able to compare all of your life insurance options to find the right coverage for you and your family’s needs.
The best way to do this is to speak with an independent agent who works with multiple companies to find you the best life insurance coverage.
Give our agents a call today, or get started with our online life insurance quote engine!
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