“Life Insurance After 50: What You Need to Know”

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Is There an Age Cutoff to Buy Life Insurance?

Insurance brokers often recommend purchasing life insurance and locking in a rate when you’re young and healthy. However, older adults can still benefit from life insurance. For instance, a well-valued term life insurance policy can help ensure your loved ones aren’t burdened with debt after you pass.

Thankfully, it’s never too late to purchase life insurance. While buying life insurance from certain insurers may be challenging depending on your age and health, it’s not impossible. Here’s what you need to know about purchasing life insurance as you age.

Age Limits for Life Insurance

Many life insurers don’t issue term life insurance policies after the would-be policyholder reaches a certain age, typically between 75 to 90 years. If you’re 55 or older, you may find it difficult to secure term life policies for 30 years or longer. Shorter-term policies may be more accessible for older seniors.

Whole life insurance policies may be easier to obtain than term life insurance, even when you’re older. Many life insurance companies sell new policies to applicants up to age 85 or 90.

If you don’t have any debt or dependents who rely on your income, your need for life insurance may be less. In such cases, a simple final expense policy may suffice to cover funeral or cremation costs. You may qualify for coverage until age 85, and some companies offer final expense insurance over 85 with higher premiums.

Types of Life Insurance

Understanding the age limits for these types of life insurance can help you plan your long-term coverage needs. It’s also important to understand how these policies differ to help you pinpoint your ideal policy.

Term Life Insurance

Term life insurance covers you for a specific period, usually ranging from one to 30 years. Your premiums are fixed, so you’ll pay the same amount during the term. Policies include a death benefit that pays out to your beneficiaries when you pass away, as long as your policy is current.

Whole Life Insurance

Whole life is a form of permanent life insurance that can cover you for your entire life, as long as you make on-time payments. The biggest difference between term life and whole life is that the latter includes a cash value account that grows tax-deferred at a minimum rate of return. You can also withdraw or borrow money from your cash account, but understand the pros and cons of doing so before proceeding. Because of the lifetime coverage, cash value account, and other benefits, whole life insurance premiums can be five to 15 times higher than those for term life insurance.

How to Determine if You Need Life Insurance

Life insurance offers peace of mind, financial protection, and other valuable benefits at any age, but it may not be for everyone. You may or may not need life insurance, depending on your unique circumstances. Consider the following scenarios to help assess your need for coverage:

You May Need Life Insurance If…

• You have a spouse and dependents. Life insurance can provide a financial safety net for your loved ones should you pass away.
• You have outstanding debts. Insurance coverage is valuable if you have debts such as a mortgage, car loan, or tax bill.
• You want to replace income. If your dependents rely on you for income or employer benefits, life insurance can ease their burden when you pass.
• You want to cover final burial costs. The average cost of a funeral with a burial is $7,848, while funerals with cremation average $6,971.
• You want to leave an inheritance. Life insurance policies can provide a tax-free inheritance to your loved ones.

You May Not Need Life Insurance If…

• You don’t have any dependents. If you don’t have a spouse, children, or others who rely on you for income, you may need little to no life insurance.
• Your spouse and dependents are already covered. If your retirement income, assets, and Social Security benefits are sufficient for your loved ones, you may not need life insurance.
• You don’t have outstanding debts. If you’re retired, the kids are grown up, and you’ve paid off your mortgage and other debt obligations, you may not need life insurance.

How to Get Life Insurance if You’re Over 50

If you’re over the age of 50 and want to get life insurance, follow these steps:

Determine What Type of Insurance You Need

Review the different types of life insurance policies to determine which one may be the most beneficial. For example, if you’re single with no dependents or debt, you may only need a final expense insurance policy. Conversely, if you’re concerned about qualifying for coverage later in life, you may want to lock in a whole life policy.

Review Your Finances and Calculate Your Needs

Determine how much life insurance you need. One general rule of thumb is to set your death benefit amount to 10 times your annual income, or higher if needed. A more practical method may be to total up your current and future debts and obligations, then subtract your liquid assets. The resulting number should give you a strong idea of how much life insurance you need.

Shop and Compare Insurers and Policies

Contact several life insurance companies to compare policies and premiums. Ask the agent if you’re eligible for the term duration you want. Alternatively, most insurers offer an online quote process that may save you time. Shopping and comparing your options can help you find the right balance of coverage and price.

If a life insurance company denies you coverage due to your age, don’t despair. Underwriting criteria vary from one insurer to another, and many providers offer policies for older adults. One potential option is guaranteed issue life insurance, especially if you have health issues. This type of life insurance typically guarantees you coverage without a health exam, although the insurer may set a maximum age limit. But with lenient eligibility requirements come potentially higher premiums and lower benefit limits, so review any policy carefully before proceeding.

You can also explore alternatives to take the place of a life insurance policy. For example, you could ease your survivors’ financial burden by directing money you would’ve paid for life insurance to build up your savings, retirement funds, or other assets. You could also set up a sinking fund to save for funeral costs and other final expenses.

The Bottom Line

While it can be challenging to purchase life insurance when you’re older, it is possible to find the policy you need. Before taking out a policy, review your financial situation and available resources to determine if you need life insurance and, if so, how much.

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