Purchasing a life insurance policy can be incredibly valuable, even for individuals who are in excellent physical health and those with sufficient savings. However, once you turn 50, you may find that your life insurance needs are much different than when you were younger. You may no longer have young children to support and you may have paid off a significant portion of your debts.
Turning 50 can be “a natural review point” for your life insurance needs, says Scott Witt, an 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.” After your 50th birthday, it’s a good idea to audit your life insurance coverage to ensure that your policy will provide adequate protection for your needs.
Best life insurance companies for people over 50
When reviewing your current insurance needs, you may find that another life insurance company or policy type is better suited for consumers age 50 and above. You may consider switching your life insurance policy from a term life insurance policy to a final expense whole life insurance plan, for example, if you are worried about age caps and maintaining your policy. Final expense insurance may also be a worthwhile option if your debts are paid off and you feel that your current assets are a sufficient legacy for your loved ones.
Based on financial stability, policy type availability and customer satisfaction ratings, Bankrate’s insurance editorial team evaluated several insurance carriers to determine the best life insurance company for people aged 50 and older. Although the best life insurance company for you will depend on your specific needs, the following carriers may be a great place to start your search if you are currently reviewing your life insurance needs:
|Company||Financial strength rating (AM Best)|
|Haven Life||A++ (Superior)|
|Mutual of Omaha||A+ (Superior)|
|New York Life||A++ (Superior)|
Haven Life offers term life insurance at affordable prices. Policies are purchased online, so if you are looking for a company with strong digital assets, Haven Life may be a good option for you. If you feel more comfortable working with an insurance agent to discuss your life insurance needs or are looking for a permanent policy instead of a term one, Haven Life may not be the right choice.
Haven Life’s life insurance products are underwritten by MassMutual, which boasts an A++ (Superior) AM Best financial strength rating. MassMutual received a customer service rating above the industry average in the 2021 U.S. Individual Life Insurance Study. MassMutual also has fewer customer complaints than average, as reported by the National Association of Insurance Commissioners (NAIC).
Learn more: Haven Life Insurance review
AIG offers several types of life insurance policies that could be a good fit for people aged 50 and older, including term life insurance and permanent coverage plans such as universal life and guaranteed issue whole life. In fact, AIG boasts that its $250,000 term life insurance policies start at just $14 per month.
However, you should be aware that AIG’s customer service score from J.D. Power is one of the lowest scores in the study, which could indicate that policyholders are often dissatisfied with its level of customer service. If budget is your primary concern, AIG could be a good option.
Learn more: AIG Insurance review
Mutual of Omaha
Mutual of Omaha offers both term and whole life insurance policies to consumers aged 50 and above. It ranked fifth overall in the 2021 U.S. Individual Life Insurance Study, meaning that its policyholders are generally satisfied with its customer service. The company is also financially strong, with an A+ (Superior) financial strength rating from AM Best.
Mutual of Omaha also offers a unique blog called Mutual Cares. This is a repository of information geared toward seniors. Articles discuss a variety of senior-oriented health topics, ways to stay connected and tips to stay active.
Learn more: Mutual of Omaha Insurance review
New York Life
If you are a member of AARP, you may want to consider getting a quote from New York Life. The company has a partnership with AARP, which offers exclusive pricing and policy features to members. If you are worried about life insurance medical exams, the AARP program through New York Life could be a great choice, as no health exams are required to get a policy.
New York Life is highly regarded by policyholders, earning a well-below-average complaint index score from the National Association of Insurance Commissioners (NAIC). An NAIC score of 1.00 represents an industry-average number of complaints. New York Life received a score of just 0.25, indicating that NAIC receives a below-average number of customer complaints about the company.
Learn more: New York Life Insurance review
If you are interested in a final expense policy, which is a type of whole life policy that provides a small death benefit to cover end-of-life expenses, Transamerica could be a good fit. The company also offers several other types of life insurance plans, including term life, whole life and universal life.
However, Transamerica received a well-below average customer satisfaction score from J.D. Power, earning just 747 out of 1,000 points. Policyholders concerned with the quality of customer service provided by their insurer may find this information disconcerting. However, Transamerica is a part of Aegon, and its AM Best financial strength score is an A (Excellent), which may put some customers at ease about the company’s financial strength.
Learn more: Transamerica Insurance review
How to choose the best life insurance for people over 50
Whether you are shopping for your first life insurance policy or thinking about making some refinements to your existing coverage, there are a few key factors to consider if you are aged 50 or older.
There are two primary types of life insurance coverage: permanent life coverage and term life coverage. A term life insurance policy expires at the end of the selected term, often 10 years, 20 years or 30 years. Term life insurance is generally more affordable since many people outlive their policy. However, permanent coverage lasts through the duration of your life and may even provide a cash value benefit that you can access while you are still living. Although this policy type may cost more, it also locks your premium rate in for life, versus a term policy premium that typically increases based on age.
If you are not sure which type of life insurance would be best for you, you can use our calculator. You may also want to consider discussing your life insurance needs with your financial advisor or a licensed insurance agent.
When choosing your life insurance policy, it is also important to determine the amount of death benefit you want to purchase. A death benefit is the sum that will pay out to your beneficiaries at the time of your death. You may want just enough to cover your funeral expenses 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 permanent coverage, such as whole life or universal life, your policy may offer a cash value benefit. A cash value benefit means that some of the money you pay in premiums may be accessible to you while you are still alive. You would eventually be able to borrow from your cash value account, and can pay it back over a period of your choice. Keep in mind that unlike standard loans, life insurance loans do not need to be paid back. Although this will likely lower the death benefit paid to your beneficiaries, it offers a way to take care of any unforeseen expenses.
Before purchasing a life insurance policy, you may want to research a company’s customer service reviews. There may be a point where you need to ask a question or make a change to your policy, so you likely want to work with a company that is known for taking care of its customers.
Usually, you can research customer satisfaction reviews directly through a company’s website. Third-party rankings, such as those provided by J.D. Power, may also be helpful to your search. Additionally, you may want to consider a company’s online and digital tools. If you prefer to handle your policy service electronically, a company with an online customer portal or mobile app may be a good choice.
Financial strength ratings are an indication of a company’s history of being able to meet its financial obligations and pay claims that policyholders and their beneficiaries file. A poor financial strength rating could mean that a company might have struggled to pay death benefits to its policyholders, depending on the number of claims being filed simultaneously. To find out if your selected life insurance company has a solid financial strength rating, you can review the rating via AM Best’s website. If the carrier has a score of A- (Excellent) or higher, the company is more likely to be financially strong now and in the future. Your insurance agent should be able to provide you with detailed AM Best rating reports about the life insurers you are considering.
Why is life insurance more expensive for people over 50?
You can typically expect to pay more for life insurance coverage once you reach age 50. First, life insurers rely on premium payments to mitigate their risk in offering you a policy. When someone buys coverage in their 20s, the risk of the policyholder passing away is generally much lower than it is for someone who is older. Although it may be an unpleasant thought, the older you are, the more likely you are to pass away based on actuarial data that life insurers use to price policies. Because of this, life insurance premiums tend to increase as you get older.
Additionally, many life insurance policies require a medical exam or a comprehensive survey with health questions. A lack of preexisting conditions, health history problems or reliance on certain medications means you are more likely to live longer. If you know your medical review will likely raise a red flag for your insurer — a probability that increases with age — you can likely expect to pay more for your policy.
Do people over 50 need life insurance?
Life insurance is a very personal consideration. If your house is paid off, your kids have finished college and you have an adequate amount of funds set aside to cover funeral costs or leave an inheritance behind, you may decide you are ok without life insurance 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 do not have to pay for funeral costs
- Help your family finish paying off a mortgage or any other debt
- Fund education for your children or grandchildren
- Leave money to your heirs
- Leave a donation to a charity you value
- Provide for your spouse or domestic partner
If a lump sum of money would help protect your loved ones against financial hardship and provide them with financial peace of mind, you might want to consider life insurance even after age 50. If you are unsure how much life insurance you need, how much you can afford or what type of policies to consider, you may want to talk to a financial planner or licensed life insurance agent.