Should I Buy Life Insurance Before I Turn 50?
Age 50 is a major milestone. Each month we receive dozens of phone calls from clients nearing their 50th birthday. Some are embracing a coming of age, while others are fighting a mid-life crisis—what they all have in common, though, is a realization of mortality and the need for life insurance. If you’ve found this article, you’re likely in this group.
Having been there myself a few years back, I know all too well how insurance companies treat us “mid-lifers.” It’s an industry standard for life insurance rates to jump after age 50. But my Farmers Insurance agent, who had handled my homeowners insurance for years, told me they wouldn’t even accept an application for a male over 50!
The good news is that there are indeed companies that will treat you fairly well at 50. However, you can save money and give yourself more options by securing your life insurance policy before the Big 5-0. Read on for insight, comparisons, and industry insider tips for finding life insurance before you turn 50.
Here’s what we'll cover in this post:
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Here’s what we'll cover in this post:
How Much Do Term Life Insurance Rates Really Increase At Age 50?
Inevitably, our health declines with age. The question is how big of a difference does a one-year age difference from 49 to 50 affect rates?
The table below compares rates for a 49-year-old and a 50-year-old male in the “Preferred Best” rate class, the lowest level of risk for the insurance company (and thus the class with the lowest rates), reserved for those in excellent health across the board.These are sample quotes from an A+ rated life insurer that has been in business for over 100 years. We included “Term Policy” rates for 10-year, 15-year, and 20-year rate guarantees, for the most commonly purchased death benefits: $100,000, $250,000, and $500,000.
Notice that the cost difference between age 49 and 50 is not huge for 10-year policies, but as you increase death benefit amounts and term lengths, the savings become significant.
If you want a policy with rates guaranteed beyond age 80, we recommend reading our article about Guaranteed Universal Life Insurance.
These polices work just like term life insurance, however, instead of locking in rates for a period of time (your “term”), you lock in rates up to a specific age (90, 95, 100, and beyond).
How Much Higher Would My Rates Be for Coverage Past Age 80?
Let’s take a look at cost comparisons for a guaranteed universal life (GUL) policy with coverage until age 90, 95, and 100 for a 49-year-old male vs. a 50-year-old male. Remember, guaranteed universal life insurance policies work just like term insurance.
Your rates and coverage are guaranteed not to change and you can cancel your policy at any time without penalty. In addition, you pay for the cost of your coverage only, which is why these policies are often referred to as term-to-90, term-to-95, or term-to-100.
In this example we will assume that both applicants are in the “Preferred Best” rate class. There are 12 different risk classes; our job as independent life insurance agents is to match our clients to the A+ rated life insurance carriers offering the best rates for their specific age, health, and lifestyle. It takes knowledge and experience, which we’re glad to share with you.
Cost differences for these policies are more significant because they extend life insurance protection for a much longer period of time.
These extended age policies are typically purchased by clients seeking lifetime coverage, but at rates lower than costly whole life insurance. GUL policies can be great options for protecting a legacy by providing tax-free cash to cover estate taxes. GUL is also a common vehicle for leaving a tax-free inheritance or pension maximization.
Guaranteed universal life insurance policies with $50,000-$100,000 death benefits are even more affordable, providing a significant amount to provide for burial expenses, medical expenses, and credit bills that are commonly left behind to the next of kin.
Whole Life Insurance
There are some whole life policies available to younger applicants that don’t require a medical exam. If you’re near age 50, though, you’ll save by taking a medical exam for life insurance.
It’s paid for by the insurance company, and can often take the place of your age 50 physical, without the prostate check! Your insurance agent can have the lab results sent to you free of charge (not even a co-pay), which you can then forward to your primary care physician.Following are sample monthly rates from an A+ rated company for a $50,000 whole life insurance policy for a 49-year-old vs. a 50-year-old.
*Let’s assume that you live to age 90 and take a look at the difference in cost over approximately 40 or 41 years if you were to buy the policy at age 49 vs. age 50.
Due to the higher cost of “no exam” whole life insurance, guaranteed universal life insurance is always a better value if you need coverage for life (until age 90 or later).
Guaranteed Issue Life Insurance
If you have serious health issues or were declined when applying for life insurance in the past, you’ll likely need to wait until age 50 to qualify for a “guaranteed issue” or “guaranteed acceptance” policy. These policies generally have a minimum application age of 50 and maximum age of 80.
Guaranteed issue policies are generally available with $5,000 to $25,000 of coverage. They are completed by phone, with no medical exam and only a few questions—you basically only need to be of “sound mind” to sign a contract and have the ability to pay.
Most clients seeking a guaranteed issue policy choose Gerber’s “final expense” policy, even though their starting rates are higher than the Globe and AARP/New York Life policies you often see promoted on TV and in direct mail. Whereas the Globe and AARP policies increase in cost every 5 years (with some ending at age 80), Gerber’s plan offers a fixed-price and fixed death benefit for your entire lifetime.
Guaranteed issue policies are typically quick and easy—mailed or emailed for signature and approved within a week. Adult children can purchase these policies for their parents, however, we do need to speak to your parent by phone so that they can authorize you being the “owner” of their coverage.
Note: Power of Attorney does not allow you to purchase life insurance for another person.
Below are sample rates for a $25,000 guaranteed issue policy for a 50-year-old male and female. These rates are guaranteed not to change, and they are from an A+ Superior-rated company. Policies are usually available until the age of 80 or 85, depending on your state.
When Should I Buy Life Insurance?
The best age to buy life insurance is as soon as you realize a loved one would suffer financially if you died. Health is never guaranteed. When you secure coverage while you are healthy, you can provide greater protection for your loved ones at a much lower cost than if you wait until you are older.
It saves money to buy coverage at age 49 vs. age 50, especially if you are a male and/or have health issues. Most of us are not in the “minimum risk” category. The most common category, “Standard Risk,” (fourth lowest risk level) rates are roughly 30 percent higher, and that 30 percent really adds up over time.JRC agents are experts at pre-qualification underwriting and matching our customers to their most affordable options. We’ll aggressively shop the market for you, and go to bat for you to ensure you get the best deal possible.
We are independent life insurance professionals, committed to earning your trust and confidence, not pushing commission-driven products or investments.
Call us toll-free at 855-247-9555, or click the button below to get a free life insurance quote online.
Managing Partner and Co-founder
Cliff is a licensed life insurance agent and one of the owners of JRC Insurance Group. He has helped thousands of families of businesses with their life insurance needs since 2012 and specializes with applicants who are less than perfect health. In his spare time he enjoys spending time with family, traveling, and the great outdoors.