How Much is Life Insurance for a 55-Year Old?

So, is it a wise decision to consider life insurance once you turn age fifty-five? For several individuals, purchasing life insurance once reaching the age of fifty-five is still a wonderful strategy, even if your children are fully grown. Many individuals who have young children or are newly married take out term life insurance plans to protect their families if anything tragic occurs. However, in their fifties, people still should consider life insurance, too, as many people in this age bracket still have loved ones that are financially dependent on them.

So, if you are thinking about life insurance once you’ve reached fifty-five years of age, you should ask yourself if your loved ones would be in financial distress if you passed away. If you answered yes, then it’s time to start considering your life insurance options.

If you are worried about what might happen to your loved ones financially if something tragic happened to you, then purchasing a life insurance policy would give them the support they’d need to handle those issues. Many individuals that are fifty-five years of age purchase life insurance to ensure their spouse’s financial support. Some individuals in this age range want to ensure their adult or nearly adult children would be financially supported as well if they were to pass away.

Thus, you can view the process of purchasing life insurance as a great way to care about your family. Still, life insurance provides other benefits you may not be aware of because of the different policy options that are available to you. With so many options available, you may take some time to figure out what you need since you don’t want to purchase too much or too little life insurance.

Term-Life Insurance

When most people think about life insurance, they realize the two common categories of life insurance, which are term life and permanent. These two choices are the fundamental options individuals typically consider when they purchase a plan. First, we’ll cover term-life insurance.

If you’re strapped financially or worried about affording life insurance, then term life might be a better option. Term life is the most affordable way to obtain life insurance once you’ve reached fifty-five years of age. The price rates of insurance policies naturally increase as you age, so purchasing anything other than term life insurance at this point will cost you significantly more. Still, you’ll need to weigh your pros and cons if you purchase term life insurance.

Term life insurance only lasts for a designated period of years. Once that period ends, your contract ends, and you no longer have life insurance. When a term life insurance contract ends, the insurance company will usually offer you a conversion to whole life or renewal for another term. Still, at that point, when your term ends, you’d be much older, and purchasing either another term-life policy or a whole life policy will cost you substantially more than when you bought it when you were fifty-five.

Most insurance providers offer term life plans that are ten, twenty, or thirty years long. However, you can choose from other length options. Keep in mind that the longer the length of the policy, the more you’ll wind up paying monthly. So, if you need life insurance for reasons that won’t be worries for the rest of your life, then term life is the way to go. For instance, many individuals purchase term life plans to ensure their spouses can retire at some point. Also, if you are still providing for children, a term life plan would be a great short-term solution.

Permanent Life Insurance

Permanent life insurance policies last until the day you die, as long as you continue to pay your premiums. You can pay a set amount for a certain period of years and not worry about continuously funding it. If you are considering permanent life insurance, you’ll have the options of whole life insurance and GUL or guaranteed universal life insurance.

First, whole life insurance offers you a straightforward choice. With this type of plan, you’ll get a death benefit and a cash value component. That means as you pay your policy’s premiums, that cash value can increase depending on how much you pay, plus interest. You can burrow a particular cash amount from your life insurance policy with very low-interest requirements whenever you need to, and for whatever reason, you’d like. That means you can get a loan and never walk into a bank.

If you opt for universal life insurance, you’ll get extras that will allow you to bolster your cash value and alternate your payment plan. A guarantee universal life (GUL) life insurance policy lasts as long as you live or until whatever age you set. That means you retain your coverage and keep paying the same monthly amount (known as a no-lapse guarantee) no matter how long you live. That means a GUL is a great option for a long-term plan, but it does cost much more than term life insurance does.

If you are most concerned about ensuring your family can cover your end-of-life expenses, mortgage, or estate obligations, then you may want to consider a permanent policy. Unfortunately, the cost of funerals is on the rise, and creditors come looking for debt repayment. Your family may also have to worry about medical expenses on your behalf. So, if you are worried about these things, a permanent policy might be a better option. Other reasons for purchasing a permanent policy would be to fund a child’s trust or to ensure a spouse will be supported if you pass away.

Price Comparisons: How Much at 20 and 30 Years?

For a fifty-five-year-old to purchase a term life plan that lasts twenty to thirty years, the cost of your life insurance can vary drastically. Your health can impact the price of the plan, as well as your habits and the amount of coverage you require. For example, shorter terms are more affordable, healthier people don’t pay as much for life insurance, and whole life insurance costs much more than term life insurance.

For a fifty-five-year-old male in excellent health and a non-smoker, a ten-year term policy at $50,000 of life insurance would cost about $22 monthly, $100,000 would cost $30 a month, $250,000 would cost $50 a month, and $500,000 would cost $100 a month. A twenty-year policy for that same man would cost $30 a month  for $50,000, $45 a month for $100,000, $90 a month for $250,000, and $165 a month for $500,000. A thirty-year policy for that same man would cost $65 a month  for thirty-years at $50,000, $80 a month for $100,000, $165 a month for $250,000, and $330 a month for $500,000.

Now let’s say you are fifty-five year old male and in average health, and you don’t smoke. Average health means your monthly rates will increase. So, a ten-year term policy at $50,000 would cost $30 monthly, $100,000 would cost $40 a month, $250,000 would cost $85 a month, and $500,000 would cost $270 a month. A twenty-year term for that same man would cost $65 a month for $50,000, $70 a month for $100,000, $140 a month for $250,000, and $410 a month for $500,000. A thirty-year term policy would cost $65 a month for $50,000, $90 a month for $100,000, $215 a month for $250,000, and $420 a month for $500,000.

Now, let’s say you are a smoker, or you’ve quit within the past year. Unfortunately, that means you’ll increase your rates by an average of fifty percent. So, for a fifty-five-year-old male that smokes, a ten-year term-life plan for $50,000 would cost $50 a month, $100,000 would cost $78 a month, $250,000 would cost $165 a month, and $500,000 would cost $310 a month. A twenty-year term policy for that same male would cost $90 a month for $50,000, $125 a month for $100,000, $360 a month for $250,000, and $520 a month for $500,000. A thirty-year term policy for that same man would cost $110 a month for $50,000, $150 a month for $100,000, $415 a month for $250,000, and $620 a month for $500,000.

The rates of whole life insurance for individuals that are fifty-five years old are much higher. Let’s say you are a fifty-five-year-old non-smoker in good health. If so, a $50,000 whole life policy would cost $150 a month, $100,000 would cost $280 a month, $250,000 would cost $690 a month, and $500,000 would cost $1350 per month.

If you are a non-smoker in average health, then you can expect to pay $150 monthly for $50,000 in whole life insurance, $280 for $100,000, $700 for $250,000, and $1400 a month for $500,000. If you are a smoker, you’ll pay a heavy price for your whole life insurance. A fifty-five-year-old individual that is a smoker can expect to pay $550 a month for $50,000 in whole life insurance, $1000 a month for $100,000, $2500 a month for $250,000, and $4000 a month for $500,000.

So, with our price comparison options, you’ll have a lot to consider. If you are worried about affordability and have some short-term issues that you want to consider while protecting your family, then term life might be the best option. However, if you can afford a whole life insurance policy, now would be the time to purchase one because they only get more expensive as you age. So, consider your options, your financials, what you can afford, and what you think your family may need if anything were to happen to you. If you can make lists about what you think they’ll need, you can narrow things down to ensure you don’t pay too much or get too little life insurance.

Shop Around

When you are looking to purchase life insurance, remember that each company has its particular underwriting requirements. That means they’ll consider your health, medical records, and many other factors to assess your health status, and that affects how much you pay. So, when you look around, try to find the company that will give you the best health class, which is a preferred plus, meaning you’re in great health. The next best is preferred, followed by regular plus and then regular, average health.

Make sure you don’t make your life insurance purchase on impulse because you’ll get better rates if you shop around and talk with multiple companies. Still, it would help if you comprehended how your life insurance company would underwrite your policy as well. One of the best strategies you can use is to seek help from an independent life insurance agent since these people work for their clients and with several life insurance policies to give you the best rates and policies to meet your needs. Work with people that work for your best interests when you select your life insurance policy—that way, you’ll know your family will get the financial support they need if anything ever happens to you.

If you’re ready to pick your life insurance plan and check out your options, consider working with us! We are independent agents that shop around with different companies to get you the best rates at no extra cost. Contact us today, and we can get the best options to you quickly!