The following term life insurance rates by age are for someone in their 50s in excellent health, with no other risk factors.
The life insurance quotes provided are from highly rated life insurance companies rated by AM Best with an A- rating and higher.
- Term Life Insurance Rates in Your 50s
- Whole Life Insurance Rates in Your 50s
- Term Life vs Whole Life Insurance Quotes
- So Why Buy Life Insurance in Your 50s
- Top 4 Reasons to Consider Whole Life
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In this article we wanted to take a moment and discuss why it might be a good idea to purchase a whole life insurance policy while you are in your 50s.
What we’re not going to do…
Is try and “sell” you on the idea that you “MUST” buy a whole life insurance policy.
Rather, we’re going to provide you with some situations where purchasing a whole life insurance policy “MIGHT” make sense and where working with an agent who is dead set on NOT offering permanent insurance coverage could be doing you a huge disservice!
*** NOTE TO THE READER ***
Three of the main arguments that many financial advisors will use for not wanting to offer their clients a whole life insurance policy is first, these types of life insurance policies generally cost multiples more than what a term life insurance policy would cost, so in their minds, by offering you a term life insurance policy, they are trying to offer you the most affordable life insurance for a 50 year old available.
When whole life insurance policies are viewed as “investments,” dollar for dollar the return on whole life insurance as an investment is typically lower than a similar investment made in the stock market.
Ordinary whole life insurance policies (versus dividend paying whole life insurance designed for high cash value) will typically net the “agent of record” a higher commission then a similar face amount term life insurance policy, which is presumably why some agent might be tempted to promote whole life insurance in cases where a much more affordable term life insurance for a 50 year old client might be the better coverage.
Which leaves us…
In a situation where we, not only need to demonstrate how a whole life policy might be better for a male or female in their 50s, while also acknowledging these “facts” about why some in the industry firmly believe that whole life insurance policies are a waste of money.
We should also…
Point out that we here at I&E offer both term life insurance policies as well as whole life insurance policies, so it really doesn’t matter to us “which” type of life insurance you believe will be the “BEST life insurance for a 50 year old” for you as long as you’re making an informed decision, and you’ve had all of your options laid out for you.
Exactly what we do here at I&E, explain to you all the options for your life insurance plan.
So, let’s first discuss 4 different situations where a whole life insurance policy might be better for you than a term life insurance policy.
You’re not going to live forever, but your insurance needs might!
Chances are, if you decide to purchase 20 or 30 year term life insurance in your fifties, many of the reasons “why” you chose to purchase this policy will slowly go away.
For example, you may have purchased your policy to protect:
- School aged children,
- A dependent spouse,
- Lost wages in the event of your death,
- A mortgage,
Which means that as you age, and your children grow up, and your mortgage gets paid off, and you enter into retirement, many of the reasons why you “needed” insurance may no longer exist.
Or at the very least, your “reasons” have decreased, making the amount of insurance that you need in your 70s or 80s much less than you did in your 50s.
But this isn’t…
Always the case. For some, it’s quite possible that one’s need for insurance isn’t going to automatically diminish when they hit their 70s and 80s.
Clients who may have a special needs child who will always be dependent upon them for support will always benefit from having a life insurance policy that won’t end after a specific term.
It’s not all that uncommon for grandparents to have to take the primary parenting role in the raising of their grandchildren, which could mean that their financial responsibilities to care for young children might extend much further than they originally intended.
This is why, is some situations, it still might make sense for someone in their 50s to want to purchase a more expensive whole life insurance policy, than a more affordable term life insurance policy.
Just Pay My Final Expenses Please
Conversely, there are those who by the age of 50 already see that their insurance needs have already diminished.
Clients like these may realize that they either don’t need to purchase a huge term life insurance policy or understand that once their existing term life insurance policy ends, they likely won’t need to purchase another one.
For clients like these…
It might make sense to purchase a small final expense life insurance policy, so that when they do pass away their family won’t be burdened with having to try and figure out how to pay for one’s final expenses or burial costs.
For those who may have existing family members who are unlikely to have the means or foresight to prepare for one’s demise, it might make sense to purchase a small whole life insurance policy on them as well.
This way when they do pass, the remaining family member won’t be burdened with having to take a “collection” to come up with the funds to pay for a proper burial.
Not the most pleasant “kind” of conversation one can have with the family, but clearly one reason why many folks might want to consider purchasing whole life insurance vs term life, particularly because these “types” of life insurance policies are also a lot easier to qualify for and may not require the insured to have to take a medical exam.
What do you mean I’m denied?
Another reason some folks might want to consider purchasing whole life insurance at age 50 to 59 is because they can’t qualify for a traditional term life insurance policy, either because of some type of preexisting medical condition, or because of some kind of “lifestyle” choice which could range from one’s passion for “exotic travel” or their passion for wanting to get from point A to point B in their automobile way too fast (AKA… too many speeding tickets!).
What we’re trying to say is that there will be a rather significant percentage of the population at age 50 and above who simply may not be able to qualify for life insurance coverage due to some pre-existing condition.
Which is why…
In cases like these, it may make sense to pursue an “alternative” guaranteed issue whole life insurance policy which will typically only have three requirements for approval.
For Guaranteed Issue, the applicant must:
- Be a United States citizen,
- Be between the ages of 50 and 85 years of age (in most cases).
- And live in a state where these types of whole life insurance policies are offered.
*** But Be Warned ***
Like the old saying goes, if it sounds too good to be true, it probably is. We will point out that these types of life insurance policies do have their drawbacks.
Mainly, guaranteed issue whole life insurance policies will only provide a small amount of coverage ($25,000 or less), the coverage tends to cost more (dollar for dollar) than other other types of life insurance, and they all contain a clause called a “graded death benefit,” which limits coverage for accidents only in the first 2 or 3 years, not covering “natural causes” of death such as a heart attack, stroke, cancer or diabetes.
If your two options available to you are:
- Option one: No insurance.
- Option two: Guaranteed issue life insurance.
It’s possible that one might find a guaranteed issue life insurance policy a decent choice.
That is of course, if their agent offers it to them, which is why we find it so strange that some agents simply don’t believe in offering whole life insurance at all!
Whole life insurance critics are “right”.
When critics of whole life insurance policies claim that whole life insurance policies are a terrible investment, in their own way of thinking, they are correct!
The problem is…
Most (if not all) of these same critics fail to fully understand the pros of cash value whole life insurance which when funded properly can provide ENORMOUS benefits to its owner besides just a death benefit.
This is why…
To truly understand why someone buying life insurance at age 50 might want to own a cash value whole life insurance policy, one must “change” the way that they think about whole life, no longer as an “investment,” but rather thinking of it as a…
“Forced Savings Account”
In which your monthly premiums go into a cash value account which will earn you a much higher return than they would in a traditional savings account in a bank, with properly designed whole life policies providing guaranteed returns ranging from 3-5%.
The only difference is…
Now that this money is stored in your “cash value whole life insurance policy” earning a higher return than traditional bank savings accounts, you will also reap many other benefits not commonly discussed or understood by those who believe term life insurance is always better than whole life insurance.
Whole Life Benefits such as:
- Tax free policy loans,
- Guaranteed Tax deferred cash value growth,
- Dividends on Participating Life Insurance,
- Improved cash flow and liquidity vs other types of “investments”,
- Death Benefit protection,
The problem is…
It does take a while for folks to “wrap their mind” around the idea of using whole life insurance as your own bank, which is why you generally won’t see advertisers on TV or Radio promote it because these “types” of whole life insurance policies and strategies generally don’t fit a call center insurance brokerage sales model.
The good news is that…
Here at I&E, we don’t operate like a call center. And we don’t assume any one type of life insurance policy is going to be the right kind for you.
And this is why we have chosen to remain an independent life insurance brokerage, able to offer a variety of insurance products from dozens of different insurance companies.
So, what are you waiting for? Give us a call today and see what we can do for you!