Finding affordable life insurance over 50 also takes planning and research. When you get into your 50's, life insurance is no longer "something that you should probably do." You either need it or you do not. There is usually a very specific reason for people who do.
Luckily, it isn't always absurdly expensive. Although it depends on your reasons for looking at life insurance. Say you are looking for something to make sure the people you leave behind get something. You will want permanent insurance which is much more expensive.
Common Reasons People Purchase Life Insurance in Their 50s
Every family is different with their own unique needs. Because people end up in wildly different situations, it's important to consider what is right for your family. Not just what most people need.
Dependents and Income Replacement
Spouse. Children. Aging parents. Most people have someone dependent on them in their 50s. Opting to protect your income can make all the difference to your family.Since most people will not retire for another 10 to 20 years, keeping up the insurance offers peace of mind.
Covering the Mortgage
Most families are in their long term home by now. Although few have paid it off. Policies to cover mortgages are easy. Look for a term policy with the length matching your remaining payment time. If you can find a decreasing term policy, that will save you money too. Decreasing term means the benefits and premiums get lower over the length of the term.
Time to Convert to a Permanent Life Insurance Policy?
Life insurance companies want you to keep your policy with them. After all, they won't get paid any more if your term policy expires and then you buy from a competitor. Which means you probably have the option to convert your term policy into a permanent policy. No medical exam needed.
A permanent policy guarantees a payout to either your heirs or estate. You also get all the perks like the cash value accumulation feature. Some people even use a life insurance policy as portfolio diversification.
You have options to take out a loan to pay off medical bills or other unexpected expenses. Many policies will offer advance payments to policy holders diagnosed with terminal illnesses.
Life insurance can protect your business as well as your family. If you do not have a buy-sell agreement in place, oftentimes your family will get your share of the business. That's not always a good thing. It can add a lot of stress for them on top of their grief.
Part of Estate Planning
Having the money for burial is one thing. It's a whole separate issue to use life insurance money to pay off your house, set your spouse up for life, and leave your heirs something.Setting up your estate is important. Deciding how your life insurance will play into it (if at all) is just a part of the life insurance process.
Leave a Little Something
Life insurance can do nice things for your family. We've worked with people who wanted to pay off their grandchildren's college. They set up their life insurance with enough for the projected cost.In the end, it's up to you and your family. If you can afford to leave something for your family, it's a nice gesture. If not, don't stress about it.
How to Save Money On Life Insurance in Your 50s
The following 6 ways make it easy to find affordable life insurance over 50.
Term Over Permanent Life Insurance
Term is always cheaper. That's the end of the story. Term life insurance has the face amount (the amount paid out when you pass) and is in effect for a set number of years. There are also a few add-ons you can get called riders. Although those usually cost extra.
The insurance company is not guaranteed to pay out. If you outlive your term the insurance company keeps the premiums to cover other people who did not. Because they are not guaranteed to pay out, they can offer dramatically lower rates.
Permanent insurance will pay out, eventually. The insurance companies has mathematicians (actuaries) who calculate the rates so they can stay in business. They know how many people statistically drop their policies after X number of years. They know the average lifespan with every combination of medical condition and accident chances.
They need to make complicated calculations to figure out how to stay in business to pay off those claims. So they reinvest the premiums in hopes to make money faster than they need to pay it out.
In short, permanent is much more expensive because it takes longer for the insurance company to make money.
Talk to an Independent Agent
Independent agents can sell the products of multiple companies. Captive agents can only sell the products of one. It's like going fishing with a trolling net versus a single rod. You might get a fantastic fish with the pole, but you have better odds with the net.An independent agent can shop the market for you. He will find the company who best fits you. Not fit your to the best in his repertoire of products.
If you choose to be extremely through (and we always recommend as much research as you have time for), talk to several agents. But be prepared to get conflicting views and opinions. Even on things as simple as how much life insurance should you get.
Know Exactly How Much Life Insurance You Need
This is the first step to life insurance. If you've had life insurance previously, it's good to take a moment to reexamine your needs.For many years, the guidelines were 3x to 7x your annual income. Now you will see people recommending anywhere from 2x to 20x your annual income.
It's not an efficient use of your capital to over-insure yourself. Take a moment to think about the specific purpose(s) of your life insurance and do the math. Alternatively, try a Life Insurance Needs Calculator.
Consider Re-qualifying for Life Insurance Instead of Renewing
We mentioned earlier that most companies will offer you a conversion option. At the end of a term, you can tell your insurance company you want to convert to a permanent policy. They will give you new rates for a permanent policy at your current age as well as the same health class.
You also may have the option to renew your term. You would take out another policy at the same health class with current age rates. This makes extending your life insurance coverage easy. It's fast and you barely have to think about it. The alternate route is to look at rates from other companies. It takes more time, but you also might qualify for better rates.
Each company considered health differently. Your BMI with Company A might rate you a preferred health class while the same BMI might get your preferred-plus with Company B.
Alternately, you might save money by renewing if your health has deteriorated since you last applied for life insurance. We recommend talking to your agent about potential options.
Layering Policies Instead of One Policy
Like most things in life, if you put in a little extra effort, you can save a lot of extra money. Taking out more than one policy to cover different needs is vitually always less expensive than one large policy.
Here is the best part. Your life insurance medical exam is good for several weeks. Sometimes as long as six months. When you take out multiple policies, every subsequent one gets more effortless.
Consider a Policy with a Medical Exam
Medical exams take time. They are often inconvenient and invasive. On the other hand, they save you money. So you have to calculate how much money your time is worth. Will you lose out by taking an hour out of your day for the exam? Or will the money you will save every month be worth the inconvenience?
You can get guaranteed issue policies. Although they are typically more expensive than a policy requiring an exam. Some no exam policies are competitively priced, we have more info on those towards the end of this article. If you are looking for rock bottom prices, then you will need to take the exam.
Term Life Rates for Affordable Life Insurance Over 50
Below are links to life insurance articles for specific ages. Each contains information and sample term life insurance rates.
Life Insurance at age 59 (in progress)
If you do not see your age here, we are still in the process of tailoring a post to your age. You can use the Instant Quote tool on your left to see your rates right now. Please call 858-703-6178 with any questions. We are happy to help and there is never any obligation to buy.
Looking for a different age range? Go here to find information on life insurance at any age.
Permanent Affordable Life Insurance Over 50
Permanent life insurance can be a good option for people who are in the financial position to afford it.
That being said, permanent life insurance is not for everyone. Permanent life insurance is more expensive, but it gives other perks. The cash value accumulation alone benefits many families in the form of vacations, covering medical costs, and other surprise expenses.
Permanent life insurance lasts until you are 121. While it is a remote possibility to outlive a permanent policy, it has never been an issue.
Permanent life insurance is a useful tool for estate planning as well as leaving something for your heirs.
Converting Your Old Policy (or Renewing)
Conversion options are becoming more common as insurance companies compete with each other. Holding on to a customer is less expensive than acquiring a new one.
In order to entice current policy holders to stay, many companies make it easy to continue coverage. Meaning renewing another term or converting to a permanent policy.
This is called the conversion option.
Check if your current life insurance policy has this before it expires. Converting can save you time. It might save you money if your health has significantly worsened since you last applied for life insurance.
On the other hand it might save you money to shop the marketing before converting/renewing. Companies change their underwriting guidelines all the time. Therefore a preexisting condition that may have severely affected your rates 20 years ago may not matter as much today.
Get Your Money Back with Return of Premium
Getting your money back might be a good option. But make sure you crunch the numbers first.
Getting all your premiums back sounds fantastic. In some cases, return of premium is worth it. Do the math first. Or better yet, have your insurance agent crunch the numbers for you. Return of premium can double your rates.
Each policy will specifically outline how the return of premium rider work. It will give the exact numbers.
Let's say you pay $50 a month for your life insurance policy. But if you add return of premium, it might be $75 to $100 dollars a month. Is that extra money every month going to affect your finances? Could it be better used elsewhere?
If that answer to both is no, consider it. Have your insurance agent calculate how much extra you will be putting in versus other ways that money could work for you.
Life Insurance Over 50 No Medical Exam
There are a couple ways to get around the medical exam portion of life insurance. You can either get guaranteed issue life insurance or find one of the few no medical exam life insurance policies. Like how to get a million dollar policy without an exam.
Guaranteed issue life insurance is exactly what it says. The insurance company will offer life insurance, but typically at impaired risk rates. They assume that if someone is trying to avoid the medical exam, they have either a known or suspected medical condition.
Some companies will offer guaranteed issue policies at reasonable rates. Talk to your insurance agent about which companies offer the most generous rates for your condition.
Other times you can find companies who will offer lower coverage amounts without the exam. SBLI is one of our favorites. They will do a $500,000 policy without a medical exam. The catch is the age cut off is 60.
How Abrams Insurance Solutions Can Help
At Abrams Insurance Solutions, we specialize in finding affordable insurance for people in all walks of life. Especially people with preexisting conditions. We know it can be a frustrating process. Which is why we promise to shop the market for you and find the most generous companies for your family's unique situation.
If you have any questions we failed to answer here, call 858-703-6178. All information is entirely confidential and there is never any obligation to buy. Whether you choose to work with us or not, we want to make life insurance as painless as possible.