It actually doesn’t matter how old you are – buying life insurance is a smart idea for many people.
Though not everyone in their 50’s needs life insurance, it’s a good time to invest in coverage rather than waiting.
Sure, most people buy life insurance when first starting a family, but there are still a lot of reasons why people in their 50’s should buy life insurance, too.
Among these is because life insurance rates go up as you age. Even buying a plan in your early 50’s will net a lower premium than buying a plan in your late 50’s, and probably by more than you might think.
At the same time prices go up, actually qualifying for coverage becomes more difficult as you age. This is not only because of you getting older, but also the fact health problems become more common as you age.
Here’s everything you need to know about buying life insurance in your 50’s.
Why You Need Life Insurance Over 50
The number one reason to buy life insurance in your 50’s is the same reason to buy it at any age.
Simply put, life insurance helps keep your loved ones financially stable in the event that you pass away unexpectedly.
Most people in their 50’s have their spouses listed as their beneficiaries. Think of it this way: your spouse relies on your income, so what’s going to happen to the household income stream when you die?
Without life insurance, they’ll be left in limbo. A life insurance policy will, instead, ensure they receive adequate income to stay on their feet during the difficult period of time following your death, and for years to come.
Those in their 50’s often take out life insurance policies which cover their dependent children in addition to their spouses, so consider this, also.
Lower Rates in Your 50’s
As mentioned above, the number one reason not to wait any longer is price. Life insurance rates go up as you age.
Buy life insurance at a younger age and not only do you qualify for better monthly premiums, but you also qualify for better overall coverage as a whole.
This is particularly true if you’re still healthy. Those in great health in their 50’s can still qualify for the best traditional life insurance policies, which has no waiting periods.
Alternatively, the older you get, the more premiums will go up and the lesser variety of coverage types you’ll qualify for.
DID YOU KNOW: a 55-year-old will likely pay more than 50% more for the same coverage than a 50-year-old.
What we’re trying to say is this – taking action is your number one way to save!
Benefits of Buying Life Insurance in Your Fifties
Now it’s time to discuss the specific benefits of buying life insurance in your 50’s.
There are a handful of other reasons to buy life insurance in your 50’s rather than waiting, other than just the rate you’ll pay.
These top benefits include:
- Choices – The younger you are, the more life insurance options are available, including no exam life insurance.
- Conversion Option – Buy young and you’ll more likely qualify for a plan with a conversion option (it converts term life to a permanent policy).
- Accelerated Death Benefit – In your 50’s, you can still qualify for an option that allows you to withdraw up to 50% of your death benefit if diagnosed with a terminal illness.
But the main additional benefit of buying life insurance when you’re in your fifties is security.
You likely understand aging and are more likely to have a mature career, a family, and other financial obligations you want to look out for.
Starting The Process
The process can be a bit of a long one. The average policy takes up to 4-6 weeks if you really want to get the lowest price.
While you can get a policy much faster, it comes with higher premiums. This is because the company is letting you skip the exam, and go through simplified underwriting.
If you don’t mind a higher price, and just want to get it all over with, then it’s an option.
However, most of our clients between 50 and 65 don’t mind waiting to save money, and medical exams and other testing isn’t so bothersome.
How Much Can You Expect to Pay?
The exact amount you’ll pay for life insurance – and the coverage you’ll receive – varies wildly depending on several factors.
However, your age does play strongly into this. At this point, your age and tobacco use will be the largest determining factors in what your policy will cost.
Other factors which directly influence your rates include your lifestyle, medical history, and family health history.
Another example is those with more serious illnesses. If you can’t qualify for a traditional policy, you may need to look at graded or guaranteed policies, which are much more costly.
The Application and Approval Process
Finding life insurance as a 50-year-old is much the same as it is at any age.
It starts with the application process. This consists of simply filling out each company’s application with your personal information.
The personal information required for coverage includes information about your lifestyle and health history, driving history, and even criminal history.
Traditional providers will also require a current medical exam. The medical exam is used by the underwriters at the company to assess your overall risk.
The actual underwriting process takes between 4 and 6 weeks for most applications. During this time, the underwriters assess your risk to the company by reviewing a variety of factors.
You’ll receive a verdict at the end of this time. You’ll be told whether or not you qualify for traditional coverage, and at what rate.
This is the first official rate you’ll receive; everything before this number is just a quote. But when you get this rate, it’s your actual offer from the insurance company, and you have several options at this point:
- Accept it. The rate is affordable, and the coverage meets your needs.
- Modify it. Maybe the rate came back higher than expected, so you want to modify the amount of coverage or coverage type to bring it back into the budget.
- Deny it. You do have the ability to say no, and keep looking. You’re never forced to keep the policy, and there is no penalty for doing so.
A Few Sample Rates
Not even sure what ballpark you’re playing in when it comes to comparing prices? Here’s a quick chart of an average 50-year old male who doesn’t use tobacco, and is looking at 10 year term life insurance rates.
|Coverage Amount||Company||Price (monthly)||Price (annually)|
Again, rates can be cheaper than this, or more expensive. This is an average male health rating, so if you’re in good health, expect even lower premiums.
Do What Is Right For You.
We’re obviously advocates of getting started right away, but don’t shy away from doing a little research on your own so you’re comfortable moving forward.
We’d much rather you understand exactly what you’re buying than discover you purchased the wrong thing several months down the road.
Most seniors who buy life insurance are also traded in an older policy, so it’s okay if you’re only buying a policy to get you to the next stage in life. What you need when you’re 60 or 70 will be different than today.
Explore companies. Explore products. Talk to your spouse or loved ones about the decision.
We can also answer any questions you have, so contact us at your convenience. No pressure, only answers.