Life insurance for 55-year-olds: Is it worth it? | finder.com
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Life insurance for 55-year-olds

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Leverage your financial position by locking down life insurance now, before rates creep up.

Life insurance underwriting is complex and based on factors such as your age, health and lifestyle. When you hit your 50s, the rates increase year over year, and they usually jump even higher at 60 and beyond. If you need life insurance, the best time to buy it may be now, while you can still lock in a good premium.

We recommend: Term life insurance

While term life is the cheapest and most basic form of protection, it’s a popular choice for those in their mid-50s. At this stage of your working life, you’re probably in your financial prime and contributing to a 401(k) or IRA. A term policy offers your family a sense of security in case something happens to you and leaves you with the funds to plan for your own future.

If you’re buying life insurance for estate-planning purposes, you might want to invest in a permanent policy. This type of coverage is more expensive, but it lasts a lifetime — so long as you make your payments on time. Most term policies give you the option to convert to a permanent policy by age 70, so there is some flexibility if your needs change.

A great pick: Policygenius

You want options, and you want to know that you’re making the best financial decision. That’s why we’re recommending Policygenius. Policygenius provides quotes from top-rated providers all in one place. You can compare policies side by side and ensure your getting the best policy at the best price.

Get a quote on Policygenius

Which is the cheapest life insurance provider for 55-year-olds?

Let’s look at a 20-year term life policy with $250,000 of coverage. According to our research, the most inexpensive providers for a 55-year-old nonsmoking man may be Banner Life at around $63.43 a month. For smokers, those same providers tend to charge $242 a month.

The cheapest providers for a 55-year-old nonsmoking woman may be Protective Life, Banner Life at around $49.45 a month. If you smoke, Banner Life may offer a rate of $180.73 a month.

Monthly costs of a 20-year, $250,000 term life policy for a 55-year-old in perfect health

ProviderMaleFemale
Banner Life$63.43$49.45
Pacific Life$64.05$49.51
Lincoln Financial Group$100.84$70.44
AIG$66.30$55.06
Protective Life$63.64$49.45

What is the typical cost of life insurance for 55-year-olds?

It’s difficult to say, because the rate you’re offered is a result of a complex range of factors, including your age, health, family history, occupation and lifestyle. However, our research suggests a 55-year-old man in perfect health can get $500,000 of coverage in a 20-year term policy for around $127.95 a month. Over the course of the policy, this comes to $30,708.69, with an expected value of $146,746.21.

The typical cost of that same coverage for a 55-year-old woman is around $94.53 a month. Over 20 years, this totals $22,687.89, with an expected value of $100,040.69.

Case study

As you’re shopping around for life insurance, you might see a noticeable price difference between coverage levels. This gets steeper as you age, which is why you should consider taking on a policy as soon as you feel you need it.

If you’re trying to figure out how much coverage to buy, this case study may help.

Let’s use a 55-year-old nonsmoking woman as an example. According to our research, a 20-year term life policy with $250,000 of coverage from Protective Life, one of the most budget-friendly providers, tends to cost around $49.45 a month. If she wants to boost her coverage to $500,000, that same provider might charge $89.44 a month — a price difference of $39.99 for double the coverage.

Lifting coverage to $1 million is a more expensive investment. According to our research, Protective Life may charge around $165.55 a month.

How much life insurance do I need around age 55?

When you’re working out how much life insurance to buy, assess your financial obligations now and anticipate your financial needs in the future. Take these factors such as outstanding debt, end-of-life expenses, and those who are financially dependent on you into account. Use our life insurance calculator to make sure that you’re not overpaying for your needs.

What is my risk of dying in the next five years?

You have passed a few milestones, and you have more ahead of you. Based on our life expectancy data, a typical 55-year-old man’s risk of dying in the next five years is 4.51%. For the average woman, it’s 2.73%.

It helps to look at these figures alongside average life expectancy in the US. A man who reaches his 65th birthday can expect to live until 84.3, while a woman is likely to live until 86.6. Of course, these are averages; around a quarter of 65-year-olds will live past 90.

Though life insurers put a huge emphasis on age, you can still qualify not only for coverage, but preferred rates. The rates increase steadily as you move through your 50s, so if you’re interested in taking up life insurance, you may want to apply soon for the best rate.

Odds of dying for a 55-year-old

Within the next…MaleFemale
Year0.78%0.48%
5 years4.51%2.73%
10 years10.59%6.46%
20 years29.35%20.01%
30 years61.43%48.43%

Life expectancy rates are merely calculations based on averages of mortality among specific population, gender and age groups. They do not predict the specific life expectancy of any one person - including you. If you're concerned about your overall health and risks, talk to your doctor or health professional.

Bottom line

Many 55-year-olds have built up some wealth and paid off a good chunk of their debts. The majority of people go for a term life policy that takes them up until their retirement, usually 10, 15 or 20 years. This gives them enough time to get their financial affairs in order, while assuring their loved ones they’ll be taken care of if anything happens. Some policyholders in their mid-50s look at life insurance as an integral part of their estate planning and choose a permanent policy that builds cash value.

At this age, you have your pick of providers. To make an informed decision, compare life insurance policies before settling on one.

Name Product Issue Ages Coverage Range Medical Exam Required
20 to 60 years old
$100,000 to $8,000,000
No
Term life insurance with no policy fees and the freedom to cancel anytime. Simple application process that can get you approved for coverage instantly.
18 - 85 years old
$10,000 to $10,000,000+
Depends on provider and policy
Compare quotes from 16 life insurance companies side by side.
18 - 64 years old
$100,000 to $3,000,000
No
Customized term life insurance policies up to $3 million, no medical exam required.
21 - 54 years old
$50,000 to $1,000,000
No
Affordable 2-, 10- and 20-year term life insurance policies. Instant quotes and no medical exams.
20 - 80 years old
$25,000 to $10,000,000
No
Quickly get a quote for coverage with this marketplace, which compares term & whole life insurance policies from 45+ carriers.
20 - 85 years old
$100,000 to $1,000,000
Depends on policy
Get a term or whole life insurance quote from Fidelity Life - starting as low as $15/day.
18 - 80 years old
$50,000 to $25,000,000
Depends on provider and policy
Get a quote within minutes from more than a dozen insurers.

Compare up to 4 providers

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