Top Life Insurance Options for Individuals Above 50 in 2023
Top Life Insurance Options for Individuals Above 50 in 2023
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Top Life Insurance Options for Individuals Above 50 in 2023

If you are in the 50+ age group and seeking optimal life insurance coverage, it’s crucial to make a well-informed choice while selecting a suitable policy. Your age will significantly impact insurance expenses and the array of choices, as will your overall health and financial objectives.

In the pursuit of the finest life insurance tailored for those above 50, we assessed various companies based on their offerings of term and cash value policies, as well as their rates.

Best Life Insurance Companies for People Over 50

Selecting the Ideal Life Insurance for Individuals Beyond 50

Choosing the Right Policy Type
Begin by determining the type of life insurance policy that suits your needs. Although various options are available, your initial decision will involve choosing between two primary categories: term life or permanent life insurance. Each policy type has its own advantages and drawbacks to weigh.

Term Life Insurance for Individuals Over 50

Term life insurance provides a fixed rate for a specific period, or ‘term,’ usually ranging from 10 to 30 years. If you pass away during this term, your beneficiaries receive the death benefit. Should you outlive the term and decide not to renew, the policy ends without any payout. Opting for renewal comes with significantly increased rates.

Compared to permanent life insurance, term life insurance generally features lower premiums, making it more budget-friendly.

Permanent Life Insurance for Individuals Over 50

Conversely, permanent life insurance (such as whole life insurance) offers lifelong coverage as long as premiums are consistently paid. If you pass away while the policy is active, your beneficiaries receive the death benefit.

Permanent life insurance typically includes a cash value element that grows over time. This cash value can be borrowed against, withdrawn from, or utilized to help cover premiums. Any outstanding loans from the cash value upon your death will reduce the death benefit.

Policy Amount and Coverage

While exploring life insurance options, you must also perform some financial calculations to determine your required coverage amount. Additionally, you’ll need to decide whether to include supplemental coverage via life insurance riders. Several factors contribute to these considerations, including:

Debts and obligations. It’s essential to secure sufficient life insurance coverage to prevent your family from being financially burdened by debts like mortgages, car loans, education expenses, or credit card debts.
End-of-life costs. Factoring in expenses related to end-of-life care and funeral arrangements is crucial. Your coverage should be adequate to prevent these costs from becoming a financial strain on your loved ones.
Financial dependents. Evaluate who relies on your financial support, such as a spouse, minor children, adult children with disabilities, or elderly parents.

Income replacement. If you’re still employed and there are individuals dependent on your income, calculate the necessary funds to replace your earnings and maintain your family’s present standard of living.
Long-term care. The need for long-term care, like assisted living or nursing home care, is increasingly common among older adults. Certain life insurance policies offer riders that can assist in covering such expenses.

Financial Stability

When comparing different life insurance providers, the financial strength and stability of the company are paramount considerations. Ensuring the longevity of the chosen company and its ability to honor claims when necessary is crucial. You can assess a company’s financial strength rating through independent rating agencies like AM Best, Standard & Poor’s, and Moody’s.

What’s the Price Tag on Life Insurance for Individuals Above 50?

According to an analysis by Forbes Advisor, the average cost for a 20-year term policy with a coverage of $250,000 is approximately $977 annually for a 60-year-old woman in sound health. For a 60-year-old man in good health seeking the same policy, the yearly cost is around $1,370.

Average Term Life Insurance Rates By Company: 20-Year, $250,000 Policy

Companies Policy name Yearly average cost for female buyer age 60 Yearly average cost for male buyer age 60
Protective Classic Choice $874 $1,244
Principal Term life $874 $1,218
Symetra Symetra SwiftTerm $939 $1,295
Penn Mutual Term life $881 $1,245
Pacific Life PL Promise Term $987 $1,290
Corebridge Financial Select-a-Term $939 $1,295
Lincoln Financial TermAccel Level Term $939 $1,295
Rates are based on 60-year-old buyers who are healthy and qualify for the best rates. Source: Forbes Advisor research.
Source: Forbes Advisor research.

Why Does Life Insurance Cost More for Individuals Over 50?

The expense of life insurance tends to rise with age due to several influential factors. Foremost among these is the impact of age on life expectancy. As individuals grow older, their projected lifespan decreases, leading to an increased probability that the insurance provider will need to fulfill a claim.

Moreover, individuals aged 50 and beyond are statistically more prone to developing significant health conditions like heart disease, diabetes, or cancer. These medical concerns heighten the risk of mortality, thereby augmenting the likelihood that the insurance company will be required to make a payout.

In essence, the combination of decreased life expectancy and a greater susceptibility to health issues in this age group contributes to the elevated cost of life insurance for people over 50.

Which Life Insurance Type Suits a 50-Year-Old?

For individuals in their 50s, the choice of life insurance hinges on specific circumstances and objectives. Here are some considerations:

Term Life Insurance:

Term life insurance is often recommended due to its affordability, making it an attractive option for those in their 50s. It provides coverage for a predetermined period, which could align well with your needs if you don’t require coverage beyond 30 years. This is particularly suitable if you want to safeguard your dependents during a specific timeframe, such as paying off a mortgage or supporting children until they become financially independent.

Permanent Life Insurance:

Permanent life insurance might be ideal if you have lifelong dependents who will require financial support regardless of when you pass away. This type of insurance guarantees a payout and can be beneficial if you aim to create a cash value component that accumulates over time. Although it takes years to accumulate substantial cash value, some policies generate this value more rapidly during the initial years. Permanent life insurance could also be appropriate if you wish for your policy to provide for funeral expenses or if you want the flexibility to tap into accumulated funds during your lifetime.

Burial Insurance:

For covering specific end-of-life expenses, burial insurance is an option to consider. This type of permanent life insurance offers a modest benefit intended to address funeral costs and final bills. It’s a prudent choice if you lack savings earmarked for these expenditures, though its coverage extends primarily to these specific costs.

Given the array of life insurance options available, enlisting the assistance of an experienced life insurance agent is advisable. Their expertise can aid you in selecting the most suitable policy tailored to your unique needs and aspirations.

Determining the Right Amount of Life Insurance for a 50-Year-Old:

The appropriate level of life insurance for a 50-year-old varies significantly based on individual circumstances and the financial responsibilities they carry. To establish an adequate coverage amount, consider the following steps:

  1. Assess Financial Dependents and Obligations: Take stock of those who rely on your financial support, such as your spouse, children, elderly parents, or other dependents. Identify existing financial obligations like mortgages, outstanding debts, educational expenses, and daily living costs.
  2. Calculate Future Needs: Project future financial requirements, including college tuition, weddings, and other anticipated expenses for dependents.
  3. Consider Income Replacement: Evaluate how much income would be needed to replace your contributions to your household in the event of your passing. This includes maintaining the current standard of living, covering ongoing expenses, and providing for your dependents’ well-being.
  4. Account for Debt and Liabilities: Determine the extent of debts and liabilities you’d want to settle to avoid burdening your loved ones financially.
  5. Factor in Long-Term Care: Consider potential long-term care costs that may arise as you age.

Is It Worth Getting Life Insurance at 50?

1.Financial Protection for Dependents: If you have family members or loved ones who rely on your income, such as a spouse, children, or elderly parents, life insurance can provide crucial financial security in the event of your passing. This ensures they are not burdened with financial hardships or debts that could arise.

2. Coverage for Outstanding Obligations: If you have outstanding debts like mortgages, loans, or other financial commitments, life insurance can cover these obligations, preventing them from becoming a financial burden on your loved ones.

3. Affordability Compared to Later Ages: While purchasing life insurance in your 50s may be more expensive than buying it at a younger age, it’s still notably more affordable compared to waiting until you’re in your 60s or 70s. Premiums tend to rise with age, so obtaining coverage earlier can result in more manageable costs.

4. Term Life Insurance Benefits: Opting for a term life insurance policy can offer substantial coverage at a reasonable cost. Term policies provide coverage for a specified period, such as 10, 20, or 30 years, which can align with your financial needs and responsibilities.

5. Peace of Mind: Having life insurance provides peace of mind, knowing that your loved ones will have financial support if you were to pass away unexpectedly. This peace of mind can be invaluable, especially during later stages of life.

Methodology

To identify the top life insurance companies catering to individuals above the age of 50, a comprehensive evaluation process was undertaken, encompassing both term life and permanent life insurance offerings. The methodology involved several steps and utilized data from trusted sources:

  1. Term Life Insurance Analysis: Research and data from AccuQuote, an established national online life insurance agency with over three decades of experience, were utilized. AccuQuote exclusively collaborates with insurance companies boasting high financial strength ratings.
  2. Cash Value Life Insurance Analysis: Data from Veralytic, an independent publisher specializing in life insurance research and analytics, was employed for the assessment of cash value life insurance products. Veralytic’s expertise lies in gauging the competitiveness of permanent life insurance offerings. Their data can generate tailored analyses for policies being considered or currently owned.

The evaluation of companies was based on the following factors and assigned weightage:

  • Term Life Insurance Rates (50% score): Analysis of term life insurance rates for healthy 60-year-old buyers for 10- and 20-year terms. Various coverage amounts, including $250,000, $500,000, $1 million, and $2 million, were considered.
  • Cost Competitiveness of Cash Value Policies (15% of score): This factor weighed the level of premiums and internal policy charges, encompassing insurance costs, fixed administration expenses, and cash value-based wrap fees.
  • Historical Performance (10% of score): Evaluation of the historical performance of the company’s investments that contribute to cash value growth, comparing them to similar products offered by other companies.
  • Reliability of Policy Illustrations (10% of score): Assessment of the consistency and accuracy over time of the company’s illustrations for its permanent life insurance products. Accuracy is crucial when long-term planning and cash value accumulation are involved.
  • Access to Cash Value (10% of score): Examination of the liquidity of cash value and policyholders’ access to it. Factors such as early-stage liquidity and potential tradeoffs between liquidity and associated costs were considered.
  • Financial Strength (5% of score): Incorporation of the financial strength ratings provided by notable ratings agencies, including AM Best, Fitch, Moody’s, and Standard & Poor’s. Strong financial standing is vital for ensuring long-term claims payment capability.

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