Life insurance for people over 50

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By the time you reach 50, you’ve probably accomplished quite a bit for both yourself and your loved ones. As such, you’re going to want to protect those decades of hard work, making sure you leave a legacy that benefits the people who matter most to you. While there are personal and emotional ways to do that, you can also accomplish that goal in a very measurable way by buying life insurance.

Many people choose to buy life insurance when they go through a major life change. They might buy a policy when they get married to protect their spouse or when they have a kid to ensure their kid will have the money needed to get a quality education. But by age 50, you might feel there’s less unknown.

“I think it’s a natural review point,” says Scott Witt, a fee-only insurance adviser and actuary in New Berlin, Wisconsin. “Prior to that age, you may have been worried about passing away prematurely without providing sufficiently for your spouse or getting your kids through college.”

But that doesn’t mean there’s no point in having life insurance over 50. By buying or maintaining a life insurance policy now, you can leave your loved ones a lump sum at the time of your death to provide for them while possibly giving yourself some perks in the near future too.

And by the time you reach your mid-60s, impending retirement raises the question: Do you still need life insurance? The mid-60s represent something of a grand pivot, in which our insurance risks shift from dying too soon to living too long.

“The majority of people retiring these days will have to live off of assets rather than a pension, so people are concerned about outliving their money,” says Craig Schubert, a Prudential financial planner based in Annapolis, Maryland.

Is life insurance still worth carrying after you turn 50? Unless you’re comfortable leaving your loved ones with your funeral expenses, yes.

Here are our top picks for life insurance companies for individuals looking for coverage after their 50th birthday.

Best over 50 life insurance

Getting life insurance quotes over 50 can feel daunting. But life insurance for people over 50 might not be as hard to come by as you expect. We’ve gathered up three quality options to get you started.

Haven Life

Do you want the cheapest life insurance for over-50 individuals you can find? If so, you’ll want to choose a simple term life insurance policy. For options, check out Haven Life. Their policies are issued by MassMutual, which boasts an A++ AM Best financial strength rating. Plus, they make it easy to purchase a policy digitally so you can put coverage in place without a big hassle.

Haven Life does require a medical review as part of the underwriting process. If you’re healthy, you should be able to get your term life policy with affordable premiums, scoring you some of the cheapest life insurance for over-50 adults.

AIG

Looking for life insurance if you’re over 50 doesn’t have to mean stressful medical reviews and potential denials. If you’re worried about being able to get a life insurance policy, look to AIG. They offer guaranteed issue whole life insurance to people between the ages of 50 and 85. These policies don’t require a medical exam, but they also don’t offer full coverage right away.

With this type of whole life coverage from AIG, if you pass away during the first two years of holding your policy then AIG pays 110% of any premiums you’ve paid up until that point. They won’t pay your beneficiaries the full face amount of your coverage (e.g., the death benefit) until the third year of coverage.

Mutual of Omaha

Mutual of Omaha offers both term and whole life insurance policies to people over the age of 50. They also ranked third overall in the most recent J.D. Power U.S. Life Insurance Study, meaning you can expect a quality insurance product and reliable customer service when you choose them.

Like AIG, they offer guaranteed issue whole life coverage. Their payout structure mirrors AIG’s, too: 110% of all premiums you pay in the first two years, then your full death benefit after the second year. If you want life insurance over 50, they’re worth checking out.

How to choose the best life insurance for people over 50

Whether you’re shopping for your first life insurance policy or considering altering your coverage, there are a few key factors to consider.

Policy type

When you shop for life insurance, you get to choose between two primary types: whole coverage and term coverage. Term coverage expires at the end of the set term (10 years, 20 years, 30 years, etc.) and is generally more affordable. While whole coverage costs more, it lasts until you die — guaranteeing your beneficiaries get your death benefit — and usually provides a cash value benefit that you can use while you’re living, too.

If you’re not sure which type would be best for you, you can use our handy calculator.

Policy benefit

Of course, it’s important to determine how much death benefit you want to purchase. This is the lump sum that will be paid out to your beneficiaries at the time of your death (assuming your policy is still in effect if you have term insurance). You may want just enough to cover your funeral expenses and to leave your loved ones a small nest egg, or you may want a policy that can provide an inheritance, pay off your mortgage or fund a child’s or grandchild’s education.

Additionally, if you choose a whole life insurance policy, your policy may offer a cash value benefit. A cash value benefit means that some of the money you pay in premiums is put into a savings account that you can access while you’re still alive. Look into how this money will grow and consider an aggressive option like variable life insurance since you’ll start accruing this value later in life.

Customer service

Before you buy coverage from a certain company, research their reviews. If you ever have questions about your policy or need to make adjustments, you’ll want a company that’s easy to work with.

Each year, J.D. Power releases a Life Insurance Study. This is a useful tool because it looks at several of the most important customer satisfaction benchmarks and distills the results down for you.

Financial stability

The last thing you want is for your loved ones to turn to your life insurance company to claim your death benefit, only to find the company doesn’t have the liquid funds to pay it out. Check the AM Best financial strength rating of any company from which you’re considering buying life insurance. If they have an A or higher, you can rest easy that they’re not likely to experience any financial instability any time soon.

Why is life insurance more expensive for people over 50?

There are a couple of key reasons you can expect to pay more for life insurance coverage once you enter your 50s. First, life insurers rely on premium payments to mitigate their risk in offering you a policy. When someone buys coverage in their 20s, that insurer can pretty much safely assume that they’ll get at least a few decades of premium payments before they need to pay out the policy’s death benefit. Later in life, there’s less certainty of this, meaning more risk for the insurer. So they pass that risk on to you in the form of higher cost.

Additionally, many life insurance policies require a medical exam. Again, this is an insurance provider’s way of limiting their risk exposure. A lack of preexisting conditions, health history problems or reliance on certain medications means you’re more likely to live longer, giving them more time to recoup costs from you. If you know your medical review will likely raise a red flag for your insurer — a probability that increases with age — expect to pay more for your policy.

Do people over 50 need life insurance?

Long story short: it depends. If your house is paid off, your kids have finished college and you have plenty set aside to cover funeral costs or leave an inheritance behind, you can probably skip the coverage.

But you might want to consider buying a policy — or keeping the one you have in place — if you want to:

  • Ensure your loved ones don’t have to pay thousands of dollars in funeral costs
  • Help your family finish paying off your mortgage or any other debt
  • Fund education for your kids or grandkids
  • Leave money to your heirs
  • Leave a donation to a charity you value
  • Provide for your partner

In other words, if a lump sum of money would help protect your loved ones against financial hardship or set them up for financial success, you might want to consider life insurance even after age 50. Now let’s look at the various ways you can use a policy.

Time to take action on life insurance over 50

While age 50 is a little late to start building cash value into a permanent life policy, that option isn’t entirely off the table. Approaching retirement also marks the last opportunity to buy term life at an affordable price.

Other possible pre-retiree life insurance moves include:

  • Converting a term life policy into a permanent one.
  • Rolling an older, permanent life policy into a more advantageous one.
  • Looking into annuity options as a longevity hedge.
  • Simply allowing an unneeded term policy to expire.

Witt says there’s often a sound financial reason not to abandon a permanent life policy. “It could have a huge embedded gain to where, if you walked away from it, you would pay significant income tax,” he says.

Schubert acknowledges that life insurance rules of thumb are hard to come by for 60-something couples.

“Everybody’s insurance needs are different,” he says. “I still have clients working in their 70s who carry life insurance to cover loss of income.”

Perplexing issues, even for the pros

If it’s any consolation, the post-50 life insurance review can prove challenging, even for insurance agents. The best over-50 life insurance might look different for you than it looks for your best friends or next-door neighbors.

Take 68-year-old Judith Maurer, the founder of Low Load Insurance Services, a Tampa, Florida, insurance company that works exclusively with fee-only financial planners. She and husband Keith came into their mid-60s with life insurance in place, but their needs changed after their son Mark joined the company in 2003 as his mother’s successor.

“Here are our goals: leave a legacy to our kids, stop paying premiums at 70, and spend down our assets so that our last check bounces,” she explains. “How do you meld those goals?”

Be open to creative approaches

Here’s how the Maurers did it.

First, Judith and son Mark purchased 10-year term life policies on each other as “key man” (top executive) insurance, to protect their business.

Next, to equalize their estate, Judith and Keith bought $100,000 single-premium universal life policies. One names Mark as the policy owner, and the other names his brother Paul as owner.

“They’re survivorship policies, so we both have to die for them to collect,” Judith explains. “So we have two policies in place that free us from worrying about leaving them a legacy. We can’t spend all our money and not leave them a legacy.”

Then, they rolled over the charitable universal life policy they’d taken out years ago to maximize their gift to their alma mater, Nebraska Wesleyan University, so they could pay it up and eliminate premiums.

Families need to have discussions

Finally, these veteran insurance agents purchased a single-premium joint hybrid annuity to protect their assets from being depleted should either of them require long-term care.

“With a $100,000 single premium, we purchased about $320,000 of long-term care benefits that we can tap if we need it, and if not, it will pass to the kids,” Judith says. “If you can take the $100,000 certificate of deposit you’ve set aside to pay for long-term care and turn it into $300,000, why not?”

Mark Maurer, now president and CEO of his mother’s company, admits life insurance can be a difficult discussion at any age.

“It’s hard because it’s one of the very few things that we pay for knowing we’ll never receive a benefit from,” he says. “If I have enough money in savings, I know I can buy a boat, but building up a nice life insurance policy does not benefit me (personally). That’s a hard conversation.”

Death: ‘The big unknown’

Witt encourages pre-retirees to look at cash-value life insurance and variable annuities with living benefit riders (guaranteeing a defined payout while you’re still alive) as a way to hedge longevity risk while still leaving something to the kids.

“Once you start having those conversations, it really helps frame whether or not you truly have enough money to retire on,” he says.

“That serves as a nice springboard for a discussion of whether you need to take some more risk with the money you do have in order to earn the income you may need to sustain you in your golden years,” Witt continues, “or whether you should take some money off the table with an annuity product.”

Judith Maurer warns that the inevitability of mortality throws a wrench into even the best-laid plans.

“That’s the big unknown,” she says. “If we knew when we were going to die, all of this planning would sure be a lot easier.”

Frequently asked questions

Is life insurance worth it for people over 50?

It depends on your specific needs and goals. If you have outstanding debt or your loved ones rely on you for a source of income (for example, pension payments), paying life insurance premiums might feel like a small price to pay to give you peace of mind that the people you value most will be comfortable after you pass.

What type of life insurance do people over 50 need?

Again, it depends. You can use our life insurance calculators to get a better idea of what policy type might be best for you and your loved ones. If you want the cheapest life insurance for over-50 individuals, look at term policies. If you don’t want to have to worry about your policy expiring, check out whole life insurance.

Is it too late to get life insurance over 50?

Absolutely not. If you’re interested in getting a policy, start shopping for options now. Coverage will only get more expensive as you age.

How do I get life insurance over 50?

If you’re worried about getting approved for life insurance, several insurers offer guaranteed issue life insurance. That means when you get life insurance quotes over 50 from these companies, you’ll definitely be able to get the quoted policy should you choose that insurer. And, in most cases, you won’t even have to worry about a medical review.