Getting Great, Affordable Life Insurance at Age 55

55 is a major changing point in life insurance. So if you get nothing else out of this post, please keep the following in mind. Age 55 is the last time most companies offer a 30 year term. Some companies, such as Transamerica, still offer 30 year terms through age 58. Yet you have significantly fewer companies to choose from. Fewer options means less competition so you might end up paying more.

Now that we’ve got that out of the way, the rest of this article will go into ways to save money, rates for men and women at age 55, types of life insurance, and health concerns about life insurance for 55 year olds.

Steps to Saving Money on Life Insurance at Age 55

Saving money on life insurance is fairly straightforward at any age. Plus it doesn’t come at the cost of the quality of the policy. Below are several tips to help you save as much money as possible on your life insurance. To get an idea of life insurance rates for your exact age, use the Instant Quotes form on this page. The lowest rates from the leading life insurance companies will instantly appear on the next page.

Buy a Term Life Policy Instead of a Permanent Life Insurance Policy

Term life insurance is simple and therefore the lowest price option. There is just a face amount (the payout) that covers you for a designated amount of time. You can add extra options called riders like a Return of Premium or a Child Life rider. These add extra features. For example, return of premium will refund all the premiums you paid if you outlive your term policy.

Overall, term policies are fairly straightforward. You also might outlive your policy. Which means your insurance company can offer drastically lower rates.

amount of life insurance at age 55
Don’t pay too much. Without specifically calculating how much life insurance your family needs, you run the risk of being over or under-insured. A life insurance needs calculator can help you keep track of all the factors.

Determine Exactly How Much Coverage You Need

Insurance companies like to throw out easy numbers when calculating life insurance. If this isn’t the first place you started research, you will probably have seen things like, “get 5x to 7x your annual income” or “most Americans need $500,000 to $1,000,000 in life insurance.” These numbers can give you a ballpark estimate, but a one size fits all approach is not financially sound decision making.

A Life Insurance Needs Calculator takes away the guesswork of how much. It’s easy. By taking away that guesswork, you know that you aren’t overpaying. What works for “most Americans” might not work for you. So take your own financial situation into account and get an accurate number before getting quotes.

Consider Re-qualifying for a New Policy Instead of Renewing an Old Policy

This is a health oriented tip. If you consider yourself healthier than when you took out your previous policy, it might be smarter to get a new one instead of renewing. For example, if you lost weight, you might qualify for a better health class. A better health class means lower rates.

Layer Multiple, Smaller Policies Instead of Holding a Single, Large Policy

Layering a policy is like brickwork. Each brick (policy) can be used for a different function. Like an arch versus a stairway. Even if one falls out, you’ll still be protected.

Each family has a different collection of reasons to buy life insurance. Your reasons to consider it might not be the same as your neighbor’s reasons. While purchasing one policy can be easier in the just-get-it-over-and-done-with sort of way, setting up a few different policies to cover different needs can often be more cost effective.

Let’s say you want to make sure your wife has income until retirement age. If you are both 55 now and are planning on retiring at 65, then a 10 year term will cover that need. In addition to retirement planning, you also want to cover your mortgage that has 17 years left. Purchasing a 20 year decreasing term will cover that need. It will also save you money in later years because the face amount and premiums will be going down every couple years.

So instead of getting one large policy to cover both the aforementioned scenarios, two policies of different lengths and types will serve your needs just as well. Plus layering as needed will save you money.

Choosing Annuity Payments Over a Lump Sum

One common assumption for life insurance is that the face amount (amount paid out upon the insured person’s passing) is given to the beneficiary in one big check. This is true most of the time. However, you have another option for payout which can reduce your premiums. An annuity payout.

Instead of that single check going to your spouse or estate, you can choose to have it paid out in smaller amounts over several years. This can work well if covering your spouse’s living expenses or providing for your children is the primary goal of your life insurance policy.

This reduces the premium because the insurance company has a few extra years to earn interest on the money it owes you instead of paying it out all at once. Because the majority of people survive their terms (even at 55), it’s a great way to reduce costs.

Rates on Term Life Insurance at Age 55

Life insurance rates for women are almost always cheaper than men’s. Because statistically (and life insurance rates are 100% based on statistics) women outlive men. You will notice in the following tables that for both men and women the monthly premiums dramatically jump between the 20 year and 30 year terms.

The most recent CDC study put the average lifespan of an American man at 76 and an American woman at 81. So at a 30 year term, there is a much higher chance the insurance company will need to pay your beneficiaries than at a 20 year term.

Rates for Men’s Term Life Insurance at Age 55 – these are the monthly rates. We assume for these that you do not smoke and are in good health.

10 Year Term$25$51$92$170
20 Year Term$45$89$162$310
30 Year Term$83$170$327$656

Rates for Women’s Term Life Insurance at Age 55 – these are the monthly rates for someone who doesn’t smoke and is in good health.

10 Year Term$21$37$68$124
20 Year Term$31$62$114$218
30 Year Term$64$119$229$446

You can compare these rates, to the sample rates at age 56 to see what waiting a year looks like.

Permanent Life Insurance at Age 55 Basics

If you didn’t like the premiums for term life insurance at age 55, consider skipping over permanent life insurance. Permanent life insurance has a higher premium because it will be used at some point.

Permanent life insurance policies provide additional benefits over a term life policy. They have the face amounts or death benefits like term policies. 

Permanent policies such as indexed universal life insurance are a great way to build up tax-free retirement income. You have the safety of a death benefit along with tax-free cash to use while you are alive.

These policies may also provide living benefits. Living benefits provide cash to you if you are ever diagnosed with a serious illness or need a nursing home.

Getting Life Insurance Without an Exam

Your opportunities for no exam life insurance will decrease next year. Don’t procrastinate if you would rather skip that part.

You still have a couple more years to take advantage of SBLI’s no exam term life insurance policy. As long as you are applying for $500,000 or less, you can get a good policy without the medical exam.

As far as pricing goes, SBLI tends to run in the middle of the pack. You can get lower cost policies, but this is an option if you simply cannot stand needles.

There are other companies who offer no exam life insurance, but those tend to be guaranteed issue style policies. Guaranteed issue policies often cost more with graded benefits.

Graded benefits mean your beneficiaries receive a reduced payout if you die within the first couple years of the policy. The idea is that since the company isn’t doing super through medical underwriting, unhealthier people will gravitate toward these products. Since the company would go out of business if every person took out a half million dollar policy a month before they died, they tend to reduce the benefits for the first few years.

Why Health Ratings Matter

Your health class determines your rates. There can be as high as a 25% premium increase between health classes. This can go back to the decision between renewing a term policy and getting a new one. For example, let’s say your BMI was high enough to get you a Standard rate class. Then you lost weight and now weigh in at a Preferred class. Now you can save a quarter of your premium every month. Although in our BMI example, when you lose weight, insurance companies want to see you keep it off for at least 12 months before improving your health ratings.

It’s common to see things like high blood pressure or high cholesterol when people are in their 50s. For underwriting life insurance for 55 year olds, controlled blood pressure and cholesterol shouldn’t be a problem with most companies.

The Bottom Line

At Abrams Insurance, we work for you. Because we are independent agents, we can offer whatever insurance company our experience tells us is best for our clients. We have built relationships with over 70 of the top rated companies in the United States. Only the best. The companies who are financially stable and the ones who will still be around in 20 years to pay out any benefits.

We promise that if we help you apply to a company and they review your application in a way that is unfair, your agent will take up your case with the underwriters and negotiate better rates. Some companies have severe aversions to certain pre-existing conditions. So in the event we cannot negotiate you better rates, we will recommend switching companies.

To view instant life insurance rates for a 55 year old, use the Instant Quotes form on this page. If you have any questions, please call one of our helpful agents today at 858-703-6178. There is never any obligation or pressure to buy. Click here to learn more about life insurance for other age groups.