Life Insurance over 50 years old can be expensive, but it doesn't have to be if you follow our advice. Take 5 minutes to read this article and learn how to get the cheapest life insurance for over 50 and a life insurance strategy many are using.
First lets clarify the misconception that there's a big price increase in life insurance once you hit age 50 or beyond. That's simply incorrect. Just like buying life insurance at any other point in your life, life insurance increases with your age - but nothing out of the ordinary when you hit your 50's. If you are searching for term life insurance for seniors, we can help with that as well. Let us guide you in this process.
Why Buy Life insurance Over 50 Years Old?
Although there are many people who purchase life insurance when they are young to protect their spouse or dependent children from financial hardships of the unexpected, there are some people who feel that once a person reaches a certain age, life insurance coverage is no longer necessary. This, however, is not the case at all.
In fact, there are numerous reasons why having life insurance coverage at age 50 and over cannot only be important but in some cases, even more essential. Just some of these reasons can include the following:
Replacement of Retirement Income
While life insurance is frequently purchased to replace lost income for a breadwinner in the case of unexpected death during his or her earning years, it can also be obtained for the replacement of lost retirement income for a spouse or significant other when you are over age 50.
In many cases, the income that is received through a pension or other retirement income source will be reduced - or will even completely stop - upon the death of the recipient. So, if you have a spouse, partner, or another individual who may also be depending on your pension or retirement income for his or her living expenses, what would happen if that income suddenly stopped?
In this case, the proceeds of a life insurance policy could be used to replace those funds so that the individual would not have to drastically reduce their lifestyle or spend down their savings in order to survive.
Paying Off Debts
When you turn 50 - or even older - it doesn't mean that your debts will automatically disappear. Therefore, if the unexpected should occur, you won't want to leave your loved ones responsible for paying them off.
Many years ago, most retirees and older individuals would have their homes, cars, and other large obligations paid off. Today, however, with people living such longer life spans, it is not uncommon to take on more debt as we go through life.
Because of this, it makes good financial sense to ensure that these obligations would be covered so that loved ones would not have to be responsible for making the regular payments for years to come.
For pennies on the dollar, life insurance can be purchased that could wipe away a tremendous amount of debt easily - allowing your loved ones to move on, at an already difficult time for them.
Regardless of your debt or income situation, most people will have at least some amount of final expenses when they die. These include the cost of a funeral and other related expenses such as a burial plot, headstone, flowers, transportation, and a memorial service. On average, these costs can run in the range of $10,000 today - an amount that would be difficult for many families to come up with on short notice. But, by having life insurance, the funds could be easily attainable so that these costs could be paid off quickly.
In addition to the funeral-related expenses, many individuals may also have a large amount of uninsured medical or end-of-life hospice costs that loved ones are also responsible for paying. Life insurance proceeds could also help in paying off these expenses.
While not everyone will be responsible for estate taxes on their assets, those who are could see more than half of their total estate value go to Uncle Sam - leaving that much less going to the ones they love. But a life insurance policy could provide a way to pay the taxes that are due, thus allowing family and loved ones to rightfully inherit what is theirs.
Those who are age 50 and over may also have a favorite charity - and by making that charity the beneficiary of a life insurance policy, the organization can receive a nice tax-free benefit to use for their works.
Keeping Your Promises
In addition to the many other reasons for owning life insurance over age 50, one of the biggest purposes to having this coverage is to keep your promises. This means that this financial tool can allow you to ensure that a child or grandchild can still attend the college of their choosing and /, or a loved one can still pay for the wedding of their dreams - even if you are not there. By having the proceeds of life insurance available, you can ultimately keep the promises made to those you care about.
Is Over 50 Life Insurance Hard To Qualify For?
Yes and No. Let me explain.
As everyone gets older, the chance of developing health issues increases. The only reason life insurance in your 50's would be harder to qualify for is if you developed any health issues.
In fact, it may be EASIER to qualify for life insurance in your 50s in some instances. For example: those who develop diabetes in their 50's receive better life insurance health classifications than those who were diagnosed in their 30s or 40s. Also, if you've had a health issue for a while and have demonstrated control over a long period of time, you may receive a better health classification than when you were first diagnosed.
If you're concerned about any health issues, the best thing to do it call us or fill out our quote request form and we'll show you the company that will give you the best life insurance rates based on your health situation.
We can help just about any health issue as long as you demonstrate control and compliance to your doctors orders.
How to Get Cheap Life Insurance Over 50 Years Old
- Contact an independent life insurance agency. We have access to over 60 top rated life insurance carriers and will find the best rates on the market based on your health situation.
- Be upfront and honest with your health issues when you speak with your agent. Every life insurance company will look at your risk differently - the key is to find the life insurance company that will look most favorably at YOUR individual situation.
Volunteering every detail regarding your health lets us "pitch" your risk to the underwriter in the most favorable light possible. If the underwriter finds something in your medical records, we don't know about then we can't go to bat for you.
- If premiums are too expensive, consider lowering your term length or lowering the amount of coverage. You can always add more coverage later.
An over 50 Life Insurance Strategy
Many consumers buying individual life insurance in their 50's are buying a term life insurance policy until they retire, combined with a final expense policy in which they'll keep throughout retirement.
A final expense policy is a small whole life insurance policy meant to pay off, well, any final expenses like burial costs and outstanding debts.
The reasoning behind this over 50 life insurance strategy is that you need the most amount of coverage during your income earning years. A term life insurance policy will take care of that at the lowest cost possible. Those who buy term life insurance and plan to keep it until they pass away are simply gambling. We are living longer every year that goes by. There's no need to keep an expensive term life insurance policy if there are no guarantees.
Once you hit retirement, you'll most likely be living off of a fixed income and the amount of coverage your term life insurance provides isn't needed. Sure it would be nice to have it - but you no longer need a lot of coverage.
Advice for Specific Ages with Sample Rates
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What If You Have a Health Condition?
If you do happen to have a certain health condition that deems you as uninsurable for a medically underwritten life insurance policy, it does not mean that all hope is lost for obtaining the life insurance coverage that you need - even if you are over the age of 50.
One option that you could go with is a no medical exam life insurance policy. Here, as the name suggests, there is no medical examination that is required. Depending on the particular type of no medical exam policy, you may or may not be required to even answer any health-related questions on the application for coverage.
Because there are no medical underwriting factors to deal with on these types of policies, no medical exam life insurance policies can usually be approved relatively quickly - often within 48 hours or less. This means that you can obtain your coverage right away.
How Much Does Life Insurance Over Age 50 Cost?
The cost of life insurance coverage for those who are over age 50 can vary a great deal. This is because there can be a variety of different factors in place - starting with the type and the amount of life insurance that you choose. It will also depend on your health, as well as the insurance carrier that you choose to apply with.
One of the other key factors that can have an effect on the amount that a person pays for life insurance coverage is whether or not they are a smoker. This is the case, regardless of whether you are over or under age 50.
Many people may not realize that, just like any other product or service that you purchase, the cost of life insurance can vary a great deal from one insurance company to another - even for policies that offer the very same benefits.
With that in mind, it is important to shop around before making your final determination on a policy that will best fit your specific needs. The best way of doing this is to work with a company or an agency that has access to more than just one insurance carrier.
If you are able to qualify for a life insurance policy that is rated as a Standard, then you will pay a premium rate that is in line with the "average" policy holder of your same gender and age range. However, if the underwriters feel that your health may not be in line with an average policyholder, then it could be that your policy will be rated as a Substandard.
In this case, the premium rate would be a higher amount than the average policy holder of your same gender and age range. There are varying degrees of a Substandard life insurance policy rating, depending on the insurance company.
If you go with a no medical exam life insurance policy, the premium rate for this type of coverage is typically higher than a medically underwritten policy. This is because the applicants for these insurance policies are usually considered to be riskier to the insurance carrier. However, in some cases, this coverage could be the only option that is available for providing the financial protection that is needed for offering loved one’s financial peace of mind.
Types of Over 50 Life Insurance Policies Available
There are many types of life insurance that are available to people over 50. These include both term and permanent coverage. Term life insurance is considered to be the most "basic" form of protection. This is because term provides just pure death benefit coverage.
Term life insurance policies are offered for a certain number of years, such as 10, 15, 20, or even 30. Typically, the premium will remain level throughout the term of the policy. Should the insured survive the policy's length and wish to remain insured after that time, then he or she will need to re-qualify for a new policy. In some cases, a term life insurance policy will be "convertible" to a permanent life insurance policy.
Permanent life insurance will offer both death benefit protection and cash value. The cash-value component of the policy is allowed to grow tax-deferred, meaning that there is no tax to pay on the growth of the funds in this account until the time the funds are withdrawn.
The policyholder is allowed to either borrow or withdraw cash from the cash value for any purpose - or the funds can be left in the account to continue growing and compounding over time.
If the permanent policy is a whole life insurance plan, the premium amount will be guaranteed never to go up - regardless of the insured's increasing age, as well as if the insured attains an adverse health condition in the future. The death benefit is also locked in on a whole life insurance policy.
Typically, when applying for either term or permanent life insurance, it will be required that you complete an application for coverage, and take a medical exam. As a part of the medical exam, you will typically be asked to submit a blood and a urine sample. The insurance underwriters want to ensure that they are not taking on too much risk with an applicant.
For those who are over the age of 50, the underwriters will pay close attention to health and health history. The insurer may wish to also review the applicant's medical records from your primary care physician and / or from any medical specialist that you may see.
Life insurance over 50 takes some planning. We help consumers over age 50 determine the right life insurance strategy for their unique situation and make sure they're securing the lowest life insurance rates available.
Please don't hesitate to contact us with any questions.