The Best Life Insurance Policies for 50-Year-Olds



Why is life insurance more expensive for people over 50?

The older we get, the more expensive life insurance becomes due to rising mortality rates. Also, the longer we live, the greater the likelihood that health events will occur. Cardiovascular factors, such as cholesterol, blood pressure readings, and body mass index, play a significant role in determining life insurance rates, and these factors tend to increase as we age.

Are there specific features of life insurance policies that become essential when considering options for individuals beyond 50?

Our 50s are an ideal age to incorporate life insurance into our estate planning. We are young enough that life insurance is still quite affordable, and estate planning is becoming a priority. Many of us have accrued wealth that we wish to protect; our children are entering adulthood and may start families of their own soon, and our mortality is becoming less of an abstract notion and more of a reality that factors into our financial lives.

Most of us in our 20s and 30s prioritized term life insurance as a cost-efficient way to cover our future income while our families were young and our mortgage principles were high. Still, many of us are seeing our term life coverage beginning to expire in our 50s. Because term life serves as a temporary solution while becoming more expensive to replace, it may also become less aligned with our long-term financial goals.

Permanent life insurance offers an effective solution for those who wish to preserve wealth and transfer wealth efficiently to the next generation while protecting our future income. Permanent life can also serve as an effective means to pay for final expenses such as burial and funeral costs. As the name implies, a key feature of permanent life insurance is that the death benefit lasts a lifetime, so it can be relied upon to meet these long-term goals. With few exceptions, death benefit proceeds are also paid to our beneficiaries free from income taxes and creditors. The cash proceeds from life insurance can also be used to divide an estate equally among multiple beneficiaries.

In contrast, the value of our investments, real estate holdings and business interests fluctuates with market forces, is susceptible to taxation and creditors, and may be difficult to divide among heirs. The financial security provided by life insurance serves as a complement to these other assets and can be used to pay for the tax liabilities and debt we may leave behind for our families. Those of us in our 50s are also getting closer to retirement and may have serious concerns about the impact of taxation and market volatility on our retirement nest egg. A key feature of permanent life insurance is that it allows you to store cash in the policy that can be accessed later in life as a tax-free source of income. In most policy designs, the cash value is protected from market do