How Much Does Over 50s Life Insurance Cost (Ages 50-59)?

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Life insurance cannot replace you, but it can replace a part or all of your income when you die. Life insurance provides a lifeline to your dependents for financial commitments if something were to happen to you. Over 50s life insurance quotes can get expensive but may be worth it. Depending on your personal situation and unique needs, there are various reasons why over 50s life insurance may be right for you.

You have dependents

If you have people in your life who depend on you financially, you need a life insurance policy. It acts as an income replacement tool, providing your surviving spouse with the means to cover monthly payments, mortgage bills, and education expenses.

You may also need a life insurance policy if you are single but support a parent or a close relative. Ask yourself: What will happen to your dependent if they were to suddenly lose you and the support you provide?

Getting life insurance at 50 can be expensive. We recommend talking with an advisor to get the best deal possible.

You have debts others will inherit

Lenders collect what is owed from your estate when you die. However, if a spouse, parent, sibling, or friend is listed as a co-borrower or co-signer, they will inherit your debt. Buying an over 50s life insurance policy can help ensure a loved one is not saddled with a debt they might not have the means to pay for.

You want to preserve the value of your estate

Life insurance is a key part of estate planning, especially for those looking to preserve the value of their estate. Proceeds from your policy can help offset expenses like estate taxes that can chip away at the inheritance you want to leave to your heirs.

You want to leave an inheritance

Life insurance is an ideal way to leave an inheritance for those you care for. That is because they will not have to pay income tax on the cash sum they receive.

You want to bolster your retirement portfolio

Some over 50s life insurance policies include a built-in investment component, called cash value. The policy’s value grows over time, usually at a fixed rate. Besides being a source for tax-free retirement income, it can buttress your investment portfolios. Its stable growth acts as a volatility buffer during a market downturn and makes it easier for you to pursue higher-risk, higher-return strategies with other investment vehicles.    

You want to take care of funeral costs

With the average funeral costs being upwards of several thousands of dollars, planning for it is a good idea. It will save your loved ones money and stress when the time comes.

You want to protect your business

You have spent years establishing your business. The last thing you would want is for it to go under after your death. If you own a business, putting a business continuity plan in place is crucial to protect it in the event of death. A life insurance plan can help a business survive if a key employee dies prematurely. It can help:

• Fund a buy-sell agreement

• Cover the cost of hiring a replacement

• Fund a supplemental retirement program

• Pay off loans and mortgages

• Payment of loans and mortgages

Which policy should I choose?

Depending on personal circumstances, certain over 50s life insurance policies will suit you better than other life insurance options. Life insurance plans are of two types — term or permanent. With term life insurance, you get coverage for a certain number of years or until a specific age. These policies have only one purpose — to pay the death benefit upon your death, provided the policy is active. These plans do not build account value and are usually six to 10 times cheaper than permanent life.

Permanent life insurance, as the name suggests, offers coverage that lasts your entire life. Many permanent life policy plans also accumulate cash value, which grows over time on a tax-deferred basis. Your policy’s value is for you to use during your lifetime. Your beneficiaries receive only the death benefit (that is, the coverage amount) when you pass on.

So, which one is right for you — term or permanent life?

It all depends on your financial needs and budget. For most people, term life insurance is sufficient. It is a more suitable option when your financial needs have an end date. For example, if you want over 50s life insurance to provide protection until you retire and/or pay off your debts, a term life insurance policy will suit you better. You can pick a policy term and coverage amount that works for you. Since term life insurance is more affordable, those on a budget will also find it an attractive option.

Permanent life insurance, in contrast, may be a good choice for financial needs that do not have an expiry date. For instance, if you have a lifelong dependent or want to leave a legacy for your heirs, consider buying a permanent life policy. High-net-worth individuals looking for an additional investment account might also benefit from buying a permanent life policy with the cash value feature.

Factors that affect the cost of life insurance

Here are some of the main factors that affect life insurance rates:

Age

Insurers look at your age and life expectancy. Statistically speaking, the younger you are, the lower the chance of your dying, which means more affordable premiums. After 50, life insurance policies start to become quite expensive.

Gender

The average life expectancy for women in Canada is 84 and for men 80. Because men are more likely to have a death benefit payout sooner, they pay more for over 50s life insurance.

Health

Life insurers look at your current health and wellbeing to determine your rates. Generally, life insurance company reserves the best rates for the healthiest applicants. An underlying health condition, like high cholesterol or high blood pressure, can push your monthly premiums up.

Smoking Status

Tobacco use hurts both your health and wealth. Smoking is a huge red flag for life insurance providers. The reason why is simple: it all comes down to mortality. Smokers are more likely to develop serious health conditions, like heart disease, and die early. To compensate for the additional risk you pose as a smoker, insurers will ask you to pay significantly more than a non-smoker.  

Family Medical History

Apart from your medical history, life insurers also check your family’s history. If a pattern of health conditions exist in your family, you may have to pay higher premiums. For example, if two or more of your family members have had breast cancer, the life insurance company may bump up your premiums.

Occupation

What you do for a living can also impact your over 50s life insurance cost. If your job involves performing dangerous duties, your premiums will be higher. While each life insurance company may define the term “dangerous” differently, it generally includes anything that puts you at a greater risk of serious injury or death. You are likely to get classified as high-risk if you are a pilot, police officer, firefighter, soldier, miner, deep-sea fisherman, or racecar driver.

Driving History

A poor driving record does not sit well with insurance companies because it points toward an increased risk of death. You are more likely to be involved in a serious accident if you are a careless driver.

Brace yourself for a higher life insurance premium if you have collected three or more driving tickets in the last six months. Moving violations, like tailgating, may also raise your life premium rates, but it is a DUI (driving under influence) that has the biggest impact. A DUI conviction can seriously increase your life insurance cost or even make you uninsurable for the next 12 months.  

Policy Type

Term life insurance policies, on average, are six to 10 times more affordable than comparable permanent plans. Within term life insurance, policies with longer terms, like 30 years, have a higher price tag than those with shorter terms.

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Policy Amount

This refers to the amount the beneficiary receives when the insured dies. The higher the life insurance policy amount, the more the over 50s life insurance will cost. A $1 million policy will be more expensive than a plan with a coverage amount of $500,000, other things being equal.

Policy Riders

Life insurance riders enhance your life insurance coverage or add new benefits — sometimes for free and sometimes for a fee. Riders like waiver of premium or accidental death benefit can increase your monthly premiums.

How much does it cost?

So, how much is life insurance for adults in their 50’s?

over 50s life insurance costs depend on your personal circumstances, the type of life insurance policy you want, and the amount of coverage you need. Generally speaking, women receive lower rates than men since they tend to live longer.

Here are sample life insurance rates for applicants who are 50-years-old. Life insurance rates tend to rise sharply in your 50’s, so do not put off buying coverage once you have decided you need it. For every year you postpone buying it, the premiums go up by 9% to 14%.  

A 50-year-old non-smoking, healthy female may pay $71 a month for a 20-year term life policy with a $500,000 death benefit. The same life insurance policy, however, may cost $93 a month for a healthy 50-year-old male.

Looking for a whole life insurance policy? Expect to pay six to 10 times the cost of term life insurance. Smokers, on the other hand, are likely to receive premium rates that are two to five times the non-smoking rates.

Why is it so expensive?

Why does life insurance cost so much for someone in their 50's?

Life insurance premiums increase as we age. That is because the older you get, the more risk you have of dying. So, all other things being equal, a 50-year-old woman will pay more for coverage than a woman who is in her 40’s or 30’s. Additionally, many 50-year-olds have an underlying health condition, like diabetes, and consequently, receive higher premiums. Best life insurance companies need to make money and so, the bigger liability you are, the more expensive your life insurance will cost you.

All the same, there are several things you can do to reduce your over 50s life insurance cost, such as:

• Giving up smoking. Staying smoke-free for 12 months can help you qualify for better rates.

• Get in shape. While you cannot stop the clock, eating well and exercising will lower your life insurance cost.

• Do not over-insure your life. Factor in your income, debt, budget, and other financial factors to determine how much coverage will be sufficient for your family. If in doubt, speak to an independent life insurance advisor. Buying too much coverage is almost as bad as buying too little since it means wasting a sizeable amount of money that could have been used for some other purposes, like taking more family vacations.

• Combine yours and your spouse’s policy into one. If you and your partner are fairly healthy, buying a joint life insurance policy may be much cheaper than purchasing two separate plans.

• Shop around. Grab quotes from as many life insurance providers as possible to ensure you are paying the lowest possible price.

Conclusion

You may need life insurance in your 50’s as much as ever, especially if you have dependents or want to leave an inheritance. It is also nice for your family to not have to worry about funeral costs.

As to how much over 50s life insurance will cost, that depends on your risk profile and coverage needs. Dundas Life works with top names in the Canadian Life Insurance industry and can help you find the right coverage at a great price.

Frequently Asked Questions

Why might someone in their 50s need life insurance?

People in their 50s often have financial obligations such as mortgages, loans, or dependent family members. Life insurance helps to cover these financial responsibilities in the event of their untimely death, providing financial stability for their loved ones. In addition, life insurance can be used to cover funeral costs, protect business investments, and even to leave a legacy or inheritance.

How can someone reduce the cost of life insurance in their 50s?

Several strategies can help reduce life insurance costs in your 50s. Leading a healthy lifestyle, including regular exercise and maintaining a healthy diet, can reduce premiums. Quitting smoking can significantly decrease rates as well. It's also wise to avoid over-insuring; buy just enough coverage to meet your financial needs. Shopping around for the best rates and considering term life insurance, which is typically cheaper than permanent insurance, can also help save costs.

What's the difference between term life insurance and permanent life insurance for someone in their 50s?

Term life insurance provides coverage for a specific period, such as 10, 20, or 30 years. If the insured person dies within this term, the death benefit is paid out to the beneficiaries. Term insurance typically has lower premiums and may be suitable for individuals in their 50s who have specific, time-bound financial obligations.

Permanent life insurance, on the other hand, provides lifelong coverage and has a cash value component that grows over time. This type of insurance can be beneficial for those wanting to leave an inheritance, cover lifelong dependents, or supplement retirement income.

What happens if I can't afford the premiums of my life insurance policy when I'm in my 50s?

If you're struggling to afford your premiums, reach out to your insurance provider to discuss your options. You might be able to reduce the death benefit and, subsequently, the premiums. If you have a permanent life policy, you might be able to use some of the policy's cash value to cover the premiums. Switching to a term life policy could also be a more affordable option.

Why might over 50s life insurance be beneficial for business owners?

Life insurance for business owners, particularly those over 50, can help protect the business in the event of their death. It can help to cover business debts, provide funds for hiring a replacement, or fund a buy-sell agreement, allowing the remaining owners to buy out the deceased owner's share of the business. Moreover, life insurance can also be used to set up a supplemental retirement program.