Life insurance for people over 50

Purchasing life insurance is an important part of many families' financial planning and providing peace of mind for their loved ones. However, once you reach the age of 50, you may discover that your life insurance requirements have changed significantly from when you were younger. You may no longer have small children to support, and you may have paid off a large portion of your debts.

According to Scott Witt, an insurance adviser and actuary in New Berlin, Wisconsin, turning 50 can be a "natural review point" for your life insurance needs. "Prior to that age, you may have been concerned about dying prematurely without adequately providing for your spouse or getting your children through college."

Best life insurance companies for people over 50

When you evaluate your current insurance needs, you may discover that another life insurance company or policy type is better suited for consumers aged 50 and up. If you are concerned about age caps and maintaining your policy, you may want to consider switching from a term life insurance policy to a final expense whole life insurance plan. If your debts are paid off and you believe that your current assets are a sufficient legacy for your loved ones, final expense insurance may be a worthwhile option.

StrongInsurance editorial team evaluated several insurance carriers to determine the best life insurance company for people aged 50 and older based on financial stability, policy type availability, and customer satisfaction ratings. Although the best life insurance company for you will be determined by your specific requirements, the following carriers may be a good place to start your search if you are currently reviewing your life insurance requirements:

Haven Life

Haven Life provides low-cost term life insurance. Policies are purchased online, so if you're looking for a company with a strong digital presence, Haven Life could be a good fit. If you prefer to work with an insurance agent to discuss your life insurance needs, or if you prefer a permanent policy over a term policy, Haven Life may not be the best option for you.

Haven Life's life insurance products are underwritten by MassMutual, which has an AM Best financial strength rating of A++ (Superior). In the 2021 U.S. Individual Life Insurance Study, MassMutual received a customer service rating that was higher than the industry average. According to the National Association of Insurance Commissioners, MassMutual also has fewer complaints than the national average (NAIC).

AIG

AIG offers a variety of life insurance policies for people 50 and older, including term life insurance and permanent plans like universal life and guaranteed issue whole life. In fact, AIG claims that its $250,000 term life insurance policies begin at $14 per month.

However, AIG's J.D. Power customer service score is one of the lowest in the study, which could indicate that customers are frequently dissatisfied with its level of customer service. If cost is your primary concern, AIG may be a good choice.

Mutual of Omaha

Mutual of Omaha provides term and whole life insurance policies to customers over the age of 50. It finished fifth in the 2021 U.S. Individual Life Insurance Study, indicating that its policyholders are generally pleased with its customer service. The company is also financially strong, with an AM Best financial strength rating of A+ (Superior).

Mutual of Omaha also has its own blog, Mutual Cares. This is a senior-oriented information resource. Articles cover a wide range of senior-related health topics, as well as ways to stay connected and active.

New York Life

If you are an AARP member, you should consider getting a quote from New York Life. The company has a partnership with AARP, which provides members with exclusive pricing and policy features. If you are concerned about life insurance medical exams, the AARP program offered by New York Life may be a good option because no medical exams are required to obtain a policy.

Policyholders hold high regard for New York Life, which received a well-below-average complaint index score from the National Association of Insurance Commissioners (NAIC). A NAIC score of 1.00 represents the average number of complaints in the industry. New York Life received a score of 0.16, indicating that NAIC receives fewer customer complaints about the company than the industry average.

Transamerica

Transamerica may be a good fit if you are looking for a final expense policy, which is a type of whole life policy that provides a small death benefit to cover end-of-life expenses. Other types of life insurance plans available from the company include term life, whole life, and universal life.

Transamerica, on the other hand, received a significantly lower than average customer satisfaction score from J.D. Power, earning only 747 out of 1,000 points. This information may be unsettling for policyholders concerned about the quality of customer service provided by their insurer. Transamerica, on the other hand, is a subsidiary of Aegon, and its AM A (Excellent) is the best financial strength score, which may put some customers at ease about the company's financial strength.

How to choose the best life insurance for people over 50

If you are 50 or older and looking for your first life insurance policy or thinking about making changes to your current coverage, there are a few key factors to consider.

Policy type

There are two kinds of life insurance coverage: permanent life insurance and term life insurance. A term life insurance policy expires at the end of the chosen term, which is typically 10 years, 20 years, or 30 years. Because many people outlive their policies, term life insurance is generally less expensive. Permanent life insurance, on the other hand, lasts for the rest of your life and may even provide a cash value benefit that you can access while you are still alive. Although this policy is more expensive, it also locks in your premium rate for life, as opposed to term policy premiums, which typically increase with age.

You can use our calculator to determine which type of life insurance is best for you. You should also talk to your financial advisor or a licensed insurance agent about your life insurance needs.

Policy benefit

When selecting a life insurance policy, you should also consider the amount of death benefit you want to purchase. A death benefit is the amount of money paid to your beneficiaries upon your death. You may want just enough to cover your funeral expenses, or you may want a policy that can provide an inheritance, pay off your mortgage, or fund the education of a child or grandchild.

Furthermore, if you choose a permanent life insurance policy, such as whole life or universal life, your policy may include a cash value benefit. A cash value benefit means that you may be able to access some of the money you pay in premiums while you are still alive. You'd eventually be able to borrow from your cash value account and repay it over a set period of time. Keep in mind that, unlike traditional loans, life insurance loans do not have to be repaid. Although this will likely reduce the death benefit paid to your beneficiaries, it provides a way to cover any unexpected expenses.

Customer service

Before purchasing a life insurance policy, you should look into a company's customer service ratings. You may need to ask a question or make a change to your policy at some point, so you should work with a company that is known for taking care of its customers.

Typically, you can find customer satisfaction reviews directly on a company's website. Third-party rankings, such as those provided by J.D. Power, may be useful in your search as well. You should also think about a company's online and digital tools. If you prefer to handle policy service online, a company with an online customer portal or mobile app may be a good fit.

Financial stability

Financial strength ratings indicate a company's ability to pay claims filed by policyholders and their beneficiaries in the past. A low financial strength score may indicate that a company struggled to pay death benefits to its policyholders, depending on the number of claims filed concurrently. You can check AM Best's website to see if your chosen life insurance company has a strong financial strength rating. If the carrier receives an A- (Excellent) rating or higher, it is more likely to be financially strong now and in the future. Your insurance agent should be able to provide you with detailed AM Best rating reports on the life insurers you're thinking about using.

Why is life insurance more expensive for people over 50?

After the age of 50, you should expect to pay more for life insurance. First, premium payments are used by life insurers to mitigate their risk in offering you a policy. When someone buys coverage in their twenties, the risk of the policyholder dying is generally much lower than when they are older. Although it may be a sobering thought, the older you are, the more likely you are to die, according to actuarial data used by life insurers to price policies. As a result, life insurance premiums tend to rise as you get older.

A medical exam is also required for many life insurance policies. A lack of preexisting conditions, health history issues, or reliance on certain medications increases your chances of living longer. If you know your medical review will most likely raise a red flag for your insurer — a possibility that grows with age — you should expect to pay more for your policy.

Do people over 50 need life insurance?

Life insurance is a highly personal decision. If your house is paid off, your children have finished college, and you have enough money set aside to cover funeral expenses or leave an inheritance, you may decide that you don't need life insurance.

However, you may want to consider purchasing a policy — or keeping the one you already have — if you want to:

• Ensure your loved ones do not have to pay for funeral costs
• Help your family finish paying off a mortgage or any other debt
• Fund education for your children or grandchildren
• Leave money to your heirs
• Leave a donation to a charity you value
• Provide for your spouse or domestic partner

If a lump sum of money would help protect your loved ones from financial hardship and provide them with financial peace of mind, you should consider life insurance even if you are over the age of 50. If you're not sure how much life insurance you need, how much you can afford, or what types of policies to look into, you should consult with a financial planner or a licensed life insurance agent.

Frequently asked questions

Is life insurance worth it for people over 50?

The decision to purchase life insurance when you are 50 or older is based on your specific needs and goals. If you have outstanding debt or rely on your loved ones for a source of household income, paying life insurance premiums may seem like a small price to pay to have peace of mind that the people you care about will be financially secure after you die.

How do I get life insurance over 50?

The process of obtaining life insurance for people aged 50 and up is similar to that of younger people. Once you've decided which companies to contact for quotes and what type of policy you want, you'll need to fill out a detailed application and may be subjected to a medical exam as part of the underwriting process. If you are concerned that your health will prevent you from obtaining coverage, you should select a company and policy type that does not require a medical exam. If you are approved for life insurance, you will most likely be required to pay the first premium payment in order to activate the coverage.

Is there a maximum age for purchasing life insurance policies?

Although it is a good idea to re-evaluate your financial situation when you reach the age of 50, you may still have similar life insurance needs as you did when you were younger. Although it varies by carrier, there is no set age at which you are no longer eligible to purchase life insurance. However, finding a policy after the age of 70 may be more difficult. When it comes to purchasing a policy, the older you are, the higher your policy premium will be. Most companies will also restrict the type of policy and death benefit you can buy as you get older.

Should I purchase life insurance for my children?

The decision to purchase life insurance for your child is a personal one. Because child mortality rates in the United States are low, purchasing life insurance for a child may not seem like a top priority. However, some families are more at ease knowing they will be able to pay for a funeral if the unthinkable occurs. In the United States, the average funeral costs between $7,000 and $10,000. If this sum would deplete your savings, you might feel more at ease purchasing a life insurance policy for your child. Life insurance can also increase your child's insurability. When your child is young, it is often easier to lock in low premiums. Then, if they develop a health problem later on, their premiums may remain low.