Life Insurance in Your 50s

Finding a life insurance policy in your 50s might require more comparison shopping than if you were buying life insurance in your 30s or 40s, but it’s not too late to find coverage.

Many insurance companies have a maximum age for selling term life insurance policies, but specific age limitations will vary based on the coverage amount and the length of the policy. You may be able to buy a 30-year term life insurance policy up to age 55 in some cases. And you may be able to apply for shorter term insurance policies after that.

If you are looking for life insurance in your 50s but have health issues, you may want to consider a guaranteed-acceptance life insurance policy. You’ll likely pay higher premiums per dollar of coverage for your policy, but your acceptance is guaranteed if you’re within a certain age range. Insurance companies issue these policies without looking at your health history or making you take a medical exam. Keep in mind these policies may have a graded death benefit for an initial period of time. Guaranteed-acceptance life insurance plans are generally a last resort for consumers who are unable to obtain other forms of life insurance.

In addition, you may want to compare traditional term life insurance policies before you commit to a guaranteed acceptance life insurance policy. Different insurance companies have different requirements for accepting applicants, and you never know which insurance carrier may offer the lowest rates.

8 Things You Need to Know When Buying Life Insurance in Your 50s

1. If you need a life insurance policy that offers coverage for more than 15 or 20 years, your 50s may be your last chance to buy a policy that best fits your needs. Once you move into your senior years, you could face age limits on term policies from many insurance companies.

2. Even if you already have life insurance, your 50s may be a good time to reevaluate your financial situation and make sure the policy or coverage amount you have is still enough to meet your needs. If you moved up an income bracket, purchased a more expensive home, had more children or acquired new debts, you may need more life insurance coverage to help your beneficiaries pay for these increased costs if you pass away.

3. Deciding how much life insurance coverage you need requires more than multiplying your income by how many years you want coverage. To get the best estimate, you’ll also want to consider your current debts, savings and future financial commitments.

4. There are several different types of life insurance policies on the market, but they generally fall into the category of either term or permanent life insurance.

   Term life insurance offers coverage for a period of time and expires when the term is finished. If you pass away while your policy is in force, your beneficiaries receive the policy benefit payout.

   Permanent life insurance can accumulate a cash value over time and doesn’t expire as long as you continue to pay your premiums. These types of policies are typically more expensive than term life insurance policies because the length of time they last and because they generate tax-deferred cash value over time.

5. Some companies give you the option to convert all or part of your term life policy to a permanent life policy while the coverage is still intact. You may not be able to afford a permanent policy now, but if you think it may be something you’ll want down the road, look for plans with this as an option.

6. Whether you are dealing with a licensed life insurance agent or a broker, be sure to check their credentials and the financial standing of the companies they represent before you agree to purchase a policy.

7. Each life insurance policy has its own rules about what will happen to your coverage if you stop paying the premiums. Generally, if you stop paying the premiums, your policy will lapse and you will lose coverage.

   Know your policy’s rules about lapses from the start of your coverage. Do you get a grace period before the policy lapses? Will you be able to reinstate the policy if it does lapse? For how long, and for what increased cost? Ask your life insurance agent or broker these questions before you enroll in any policy.

8. Take advantage of the “free-look” period that many insurance companies offer for up to 30 days after you purchase a policy. You can use this time to review the details of your policy to ensure it meets your needs.

Your life insurance shopping experience may take a little longer in your 50s than it might have in your 20s. At this age, it helps to shop around and get quotes from multiple companies. It’s important to think about all the items listed above so you can find the right life insurance policy and coverage amount for your needs.