Fact CheckedAre you looking for the best life insurance for people over 50? Then, it’s likely you feel the heat is on.
Reaching your 50s is a phase when children are independent, businesses are hopefully thriving, and parents are aging. Individuals over 50 might want to reassess their life insurance needs.
Life insurance offers numerous advantages, such as paying off a mortgage, settling outstanding debts, covering funeral and burial expenses, or ensuring your children and spouse maintain their standard of living. Continue reading to learn about the best life insurance options for those over 50 and essential considerations for securing insurance at this stage.
“Consumers still want to have the option to explore coverage online, but they also want to be able to talk to a professional, the survey revealed. More than two-thirds of those surveyed (68%) said they would buy life insurance through an agent, while 38% said they would likely buy coverage online.”
Insurance News Net, Half of Consumer Think Life Insurance is Not Relevant
Over 50 – Should You Select Term or Permanent Coverage?
Life insurance comes in two primary forms:
- Term: This type of coverage suits most people most of the time. It’s temporary protection used for income replacement should you die unexpectedly. You select a coverage amount and period for which you want to be protected and pay a premium to an insurance company. If you die during your term, the company pays your beneficiaries.
- Permanent: This is coverage guaranteed for life and will pay out a benefit whether you pass away tomorrow or live to 95. Because the insurance company knows they will be paying out a claim to your family, the cost is higher than term coverage.
What Do I Suggest?
Those who have read this blog know that the majority of consumers purchase term insurance to protect their lifestyle, replace income and mortgage debt.
However, as you get older, permanent insurance becomes more viable. This is because term insurance gets more expensive, and permanent insurance guarantees a payout. So, the argument that the term is far less costly starts to fall apart here.
Also, in our 50s, we start to become more aware of our mortality and many of us may have experienced the loss of a friend or family member. Permanent insurance is hands down the best option for taking care of final expenses or leaving a gift to our children or loved ones.
Ultimately, your situation dictates which type of life insurance works for you in your 50s.
How Much Coverage Do You Need: Life Insurance Over 50
So, as you can see, there are many things to consider before you buy a life insurance policy. One of your most significant decisions is how much coverage is enough!
Sadly, many Canadians in their 50s are underinsured because they don’t do the math to figure out how much it costs to replace a breadwinner.
It’s essential to go through:
- Your household income
- Debts
- Projected Income
- Goals
All of this determines how much coverage you need to take out.
Reasons You Need Life Insurance Over 50
Your 50s aren’t what they used to be. No, siree! I am an excellent case in point. My son is 12 years old, and I am in my late 50s. People start families later and live longer.
This means financial obligations last well into your senior years
This leaves much room for life insurance planning in your 50s. That being said, companies still view you as a higher risk to insure than you were in earlier decades.
So, let’s look at why you may need life insurance right now!
1. Your Family May Still Need Your Income
Life insurance is usually about income replacement. Most people who call me do so because they are worried that if they die unexpectedly, their loved ones will flounder financially. Remember, your ability to earn an income dies when you die.
If you have debt and dependents, life insurance is a no-brainer.
I2. Divorce & Dependents
Divorce is never easy, but when you add kids, debt, and a mortgage, well, then it gets complicated.
You can see the importance of taking out a life insurance policy just in case the primary breadwinner dies unexpectedly. That means child support stops, and the person in a vulnerable situation wants to ensure they are covered.
3. Business Interests
Businesses cost money and take up a lot of time. For many reasons, entrepreneurs should consider taking out a life insurance policy.
The first situation that comes to mind is to cover a loan. Often, a bank requires an applicant to take out a term policy to cover the loan just in case they die before it is paid off.
Another reason entrepreneurs take out life insurance is to cover their contribution should they die unexpectedly. This is called Key Person coverage. What would it take to replace you? If you’re a specialist, it may cost a bomb.
This protection is meant to care for your partners, spouses and employees should a worst-case scenario unfold.
4. Final Expenses & Estate Planning
So this is one of the main reasons people consider buying life insurance in their 50s!
Far too many people die without wills or a plan for their funeral. Did you know burials cost a lot of money?
Costs start to build up, and your loved ones can be set back $5K—$20K, depending on the deceased’s wishes. That’s where final expense insurance comes in.
For a small monthly amount, you can leave your family enough cash to take care of everything without digging out their checkbook. Heck, you can even plan for taxes attached to your estate.
Some people wait to address this need until they’re in their 60s or 70s. Better late than never, but it’s important to remember that a Final Expense policy will be a lot more affordable when you’re in your 50s.
5. Children With Disabilities
If you have a child with a disability, you know what a big responsibility this is…
…and it doesn’t go away when you die.
Life insurance can help you ensure funds are available for your child no matter what happens to you.
This is a highly complex topic. Trusts are typically used to manage these funds, and all considerations must be accounted for.
Taxes and government benefits are just a few things that impact your decisions in this area.
The Best Life Insurance Over 50 & Up! Your Health
Your health is connected to your premiums, truer than ever in your 50s. You may have had some medical issues at this point in your life.
The impact is minimal if your condition doesn’t affect your longevity and is under control. Most people are healthier than they think. Elevated cholesterol or high blood pressure aren’t serious unless they cause severe consequences… and being overweight isn’t high risk unless it leads to serious health issues like stroke.
Age Is More Than a Number in Your 50’s
There are no ifs, ands, or buts about it. Life insurance does cost more the older you get!
I can hear you complaining already! Hey, James, you just told me that life insurance is more affordable than I think – what’s the deal?
The deal is life insurance. It’s cheaper than you think, but that doesn’t remove the cold, hard fact that life insurance is an industry based on risk.
So, let’s examine your age and how it corresponds to your premiums right now!
Basic Term Life Insurance Rates Over 50
For this example, I’m using standard rates. For the most part, on this site, I use standard because it’s the rating MOST people qualify for.
Even super-healthy people receive standard health rates the majority of the time.
Don’t get me wrong, some clients qualify for better rates, and that might be you – which is an added perk. It means you will do even less than you think – but it’s not as common.
I’m also showing you rates for 30-year terms from 2 different insurers, and you will find out why I did that below.
RBC Life Insurance Rates: Women Standard Rating, 30 Year Term
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| Age | $500,000 | $250,000 |
| 50 Year Old Female | $165.51 | $97.02 |
| 51 Year Old Female | $181.31 | $106.67 |
| 52 Year Old Female | $198.63 | $117.32 |
| 53 Year Old Female | $217.67 | $129.06 |
| 54 Year Old Female | $238.55 | $142.02 |
| 55 Year Old Female | $261.54 | $156.33 |
| 56 Year Old Female | NA age cutoff | NA age cutoff |
| 57 Year Old Female | NA | NA |
| 58 Year Old Female | NA | NA |
| 59 Year Old Female | NA | NA |
| 60 Year Old Female | NA | NA |
*Quotes above are for RBC Life Insurance 30 Year Term, monthly, Standard Class, non-smoker. Your rates may differ depending on your unique circumstances. August 2021.
Ivari Life Insurance Rates: Men Standard Rating, 30 Year Term
|
||
| Age | $500,000 | $250,000 |
| 50 Year Old Male | $303.30 | $155.03 |
| 51 Year Old Male | NA age cutoff | NA age cutoff |
| 52 Year Old Male | NA | NA |
| 53 Year Old Male | NA | NA |
| 54 Year Old Male | NA | NA |
| 55 Year Old Male | NA | NA |
| 56 Year Old Male | NA | NA |
| 57 Year Old Male | NA | NA |
| 58 Year Old Male | NA | NA |
| 59 Year Old Male | NA | NA |
| 60 Year Old Male | NA | NA |
*Quotes above are for Ivari Life Insurance 30 Year Term, monthly, Standard Class, non-smoker. Your rates may differ depending on your unique circumstances. July 2024.
“There’s a problem at the intersection of human nature and life insurance: When you’re young and healthy and able to get cheap insurance easily, you can’t imagine needing it—or at least not enough to go to the trouble and expense. But if your health declines and you suddenly find insurance compelling, you may not be able to get it, or at least not at a price you can afford.” Forbes, How Much Life Insurance Do You Really Need?
The Difference Between Men & Women
A big difference exists in life insurance between a man and a woman. This is because, statistically speaking, women live 5% longer than men, which translates into savings for life insurance if you are a female.
So ladies, all things considered equal, you pay 30% less than men for your life insurance!
As you can see, there’s a vast difference in premiums for a 50-year-old man and a 50-year-old woman with a standard rating.
For example, our female client wants $500k of coverage for 30 years. She pays $165.51 per month with RBC insurance.
A man looking for identical coverage with RBC pays $239.31 per month.
Our female client pays $26,568 less over her 30-year term! OMG!
Now, that’s a lot of cash. But that’s not all!
If our male client gets identical coverage with Ivari insurance, he will pay $303.30 monthly.
So not only does he pay 30% more than his female counterpart, but he also pays $15,145.20 more with Ivari over his term than he will with RBC life insurance. Double Whammy!
There are other pitfalls to watch out for when looking for life insurance in your 50s!
The Difference Between Carriers
Check out Ivari Canada’s rates for the 30-year term…what do you see? There are no rates listed for ages 51 and above. Why is that?
Ivari’s maximum issue age for a 30-year term is age 50. That means anyone 51 and over is ineligible for a term 30 policy with Ivari!
So, if you’re 54 years old and looking for a term 30 product with Ivari, I’m afraid you’re out of luck.
However, with RBC insurance and many other carriers, you can get a 30-year term policy up to 55.
This may not seem important, but it sure is if you’re looking for level premiums to age 85 to protect a mortgage or debt. Canadians have children later, live longer, and carry more debt into their senior years.
One Year Can Make a BIG Difference: 55 Is a BIG Birthday
Knowing the cut-off dates for terms is essential if you are looking for coverage in later life.
If you want 30 years of coverage, your 50s are your last opportunity. You can get a 30-year term until your 55th birthday.
After that, you have to consider a 20-year term. This makes perfect sense, as a 30-year term at 55 takes you until your 85th birthday.
Let’s see how your 50s unfold:
- Life Insurance Ages 50 & 51: At ages 50 and 51, life insurance rates stay in the same ballpark—although every year that passes costs you more. If you’re in your 50s and looking for a 30-year term, this is the time to pull the trigger.
- Life Insurance Age 52: Rates for men and women have jumped. For example, a 51-year-old male pays $288.45, and a 52-year-old male pays $317.70. That’s $10,530 over your term.
- Life Insurance Age 53 & 54: This trend of escalating premiums continues.
- Life Insurance Age 55: Age 55 is a significant life insurance birthday. It’s the last year you can get 30-year term coverage.
- Life Insurance Age 56: You must check out a 20-year term or permanent coverage.
20 Year Term Coverage Is Important in Your 50’s
If you are looking for the best life insurance in your 50s, chances are you want to cover it in a shorter term. This is where a 20-year term comes in.
It’s less expensive and an excellent fit for those who don’t need long-term protection.
Selecting the RIGHT Company for Your Situation is KEY
I say this again and again in all my articles.
Not all life insurance companies are created equal. Each insurer has a particular area of expertise. This means some offer more competitive rates than others for specific medical issues…
…even weight!
The key to obtaining the most affordable and comprehensive life insurance is to consult an independent life insurance agent.
We know the ins and outs of the underwriting guidelines for the best insurers in Canada. This enables us to pick out the best company for your unique circumstances.
Many people select a company based on name recognition or personal recommendation. This is NOT the way to go. It can cost you tens of thousands of dollars over your term. It’s not a small thing.
Don’t Be Caught Underinsured. Call Policy Architects Today!
If you are looking for the best life insurance in your 50s, we are the agency for you!
The advice I give to people in their 30s is often very different from what I give them in their 50s.
That’s why speaking with an independent life insurance agent is essential.
Failure to do so can result in you overpaying thousands of dollars over the life of your policy. At Policy Architects, we don’t want you to pay a single penny more than you have to!
