Life insurance for 59-year-olds: Is it worth it? | finder.com
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Life insurance for 59-year-olds

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Plan for the unexpected and sign up for life insurance while good rates are still within reach.

By your 59th birthday, you’ve probably gone through your wealth-building phase. A life insurance policy can help you to protect everything you’ve worked so hard for, like your family, your financial assets and your business if you have one.

Life insurance policies are the product of many factors, and age is one of the biggest. When you’re in the 50 to 59 age bracket, rates increase year over year, and they usually jump even more when you creep past 60. So, if you’re thinking of purchasing life insurance, you’ll risk paying more for a policy if you wait. The good news is, at this stage of your life, you’re most likely in a good position to buy the coverage that suits your needs.

Life insurance companies for 59-year-olds

Name Product Issue Ages Minimum Coverage Maximum Coverage
18 - 85 years old
$50,000
$10,000,000
See the most affordable quotes from 16 life insurance companies side by side. Get help and advice from a team of licensed experts.
18 - 80 years old
$50,000
$25,000,000
The easy way to compare and buy term life insurance. Get a quote in 2 minutes from more than a dozen companies.
18 - 64 years old
$100,000
$2,000,000
Customized term life insurance policies up to $2 million, no medical exam required.
20 - 95 years old
$100,000
$1,000,000
Get a term life insurance quote from Fidelity Life - starting as low as $15/day.
N/A
$100,000
$50,000,000
Health IQ aims to make life insurance more affordable for the health conscious.

Compare up to 4 providers

Which is the cheapest life insurance provider for 59-year-olds?

Let’s use a $250,000, 20-year term policy as an example. According to our research, the cheapest life insurance providers for a 59-year-old nonsmoking man tend to be Banner Life and William Penn at $99.11 a month. As always, smokers pay more for life insurance — in this case, the best rate is around $339.70 a month from these same providers.

For a 59-year-old nonsmoking woman, the most cost-effective option may be Principal Life Insurance, which tends to charge $70.33 a month. If you smoke, Banner Life and William Penn might offer a rate of $250.60 a month.

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

You’ve lived a long, eventful life already, and you can expect to hit a few more milestones. Based on our life expectancy data, if you’re a typical 59-year-old man, your risk of dying in the next five years is 5.96%. For women, the figure is lower at 3.57%.

To give you an idea of the average life expectancy in the US, a man who turns 65 years old is likely to live until 84.3, while a woman can expect to reach age 86.6. Remember, these are averages; about a quarter of 65-year-olds will live past 90.

Though age is a life insurer’s number one consideration, you’re probably still in a good position to get coverage. If you’re free from major health conditions like heart disease and diabetes, you’re likely not deemed too risky to insure. That being said, the rates tend to jump from year to year when you’re in your 50s and 60s, so if you’re thinking of signing up for a life insurance policy, you might not want to wait too long.

Odds of dying for a 59-year-old

Within the next…MaleFemale
Year1.06%0.63%
5 years5.96%3.57%
10 years13.75%8.69%
20 years38.36%27.58%
30 years75.55%63.55%

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.

What is the typical cost of life insurance for 59-year-olds?

Life insurance underwriting is complex, and the rate you’re offered is a result of a range of factors, such as your age, health, family history, occupation and lifestyle. It also depends on whether or not you opt for a no-exam policy. While purchasing a policy in your late-50s is more expensive than it is in your early- and mid-50s, preferred rates may still be within reach.

According to our research, for a 59-year-old nonsmoking man in perfect health, the typical cost for $500,000 of coverage in a 20-year term policy — one of the most popular policy options — is $200.02 a month. Over 20 years, this totals $48,005.66, with an expected value of $191,813.78.

If we look at that same policy for a 59-year-old nonsmoking woman, the average cost is around $140.15 a month. This adds up to $33,635.31 over the life of the policy, with an expected value of $137,914.23.

What is expected value and how is it determined?

The expected value (EV) of a life insurance policy is the anticipated value based on the odds that you’ll die and your death benefit is paid out. You can find the expected value by multiplying the probability of you dying by the payout of the policy. If the expected value is higher than the total cost of the policy over the term length, then it may be considered a good investment. However, if the expected value is less than the total amount you’ll pay into the policy throughout the term, then you may want to look at other providers or alternatives to life insurance.

Let’s look at an example. Say you’re a 50-year-old nonsmoker who’s thinking about taking out a 20-year term life policy for $500,000 at $79.88 a month. As a man, you have a 20.97% chance of dying within the next 20 years, so you multiply that by $500,000 to get an expected value of $104,859.38. Since the total cost of your policy over 20 years adds up to $19,171.89 — less than the expected value — then your life insurance policy may be considered a good investment for the future.

What is the best life insurance policy for 59-year-olds?

It’s not an exact science. Each policy reflects the policyholder’s unique needs.

To answer this question, begin by thinking about why you’re buying life insurance. Are you hoping to leave enough money to pay for your funeral and debts, or do you want to give your family the extra funds they need to maintain their lifestyle? Are you aiming to make sure your kids are comfortable when you’re gone, or do you want to leave a lasting legacy that benefits your grandkids, too? Do you want to simply float your company until they find a replacement, or provide cash flow for a longer period of time?

Then, consider how long you need your life insurance to last. The questions above will help you answer that and figure out the type and amount of coverage you need.

The majority of 59-year-olds choose a 10- or 20-year term life policy. This generally takes them up until their retirement and gives them enough time to pay off outstanding debts, such as a mortgage. If they pass away during that period, their policies not only replace lost income, but stop their families from being saddled with a financial mess. Term life is the most basic form of protection, but for many 59-year-olds, it makes sense — they have less debts and more wealth, and they’re putting more money toward their 401ks and IRAs. They may also be contributing to spousal life insurance coverage.

By choosing term life and continuing to build up a nest egg, policyholders offer their families financial security while planning for their own future.

If you’re purchasing life insurance for estate planning purposes, a permanent policy might suit you better. Though it’s more expensive, it provides lifelong protection and accumulates cash value. For affluent 59-year-olds, survivorship and universal life policies tend to be the most appealing options.

Many term policies come with the option to convert before the policy ends or by age 70, so if you change your mind, you can switch to a permanent policy later on.

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How do I calculate my life insurance needs?

When you’re crunching the numbers, consider your financial needs now and in the near future. If you’ve had a life insurance policy in the past, chances are your situation has changed in more ways than one. You might have paid off your mortgage, gotten remarried and covered your kids through college. You may have bought a second home or welcomed grandkids. Typically, as you age, you have fewer debts and more wealth or financial assets. If that’s the case for you, be careful of buying too much life insurance.

Think about the following factors:

  • Outstanding debt. Of course, you may still have debt, such as a mortgage or car loan. If you pass away, that debt will be your survivors’ responsibility, so you may want to leave enough money to cover that.
  • End-of-life expenses. Fact: Funerals are expensive. To take the financial burden of yours off your family, you can set aside some funds to cover your funeral and burial costs.
  • Spouse. Are you married? In logical terms, having a spouse is a financial responsibility. Should you die, a life insurance policy can provide them with the income they need to survive.
  • Spouse’s age and lifestyle. The younger and healthier your spouse is, the more coverage you’ll need. And if they have a good source of income, like from working, you can probably reduce the amount of coverage.
  • Age of children. If you have children, consider their life stage. If they’re working, earning money and climbing their own career ladders, you may not need to purchase as much coverage.
  • Grandchildren. Many policyholders in their late 50s add on extra coverage for their grandkids’ benefit.
  • Care. At this age, you may have ailing parents, and you might be covering their medical expenses or nursing home costs. If so, factor that in when you’re mapping out your life insurance needs.
  • Financial safety net. Do you need to protect your family and help them maintain the lifestyle they’ve gotten used to? You might want to consider “cushion coverage.”
  • Legacy. To take it one step further, you can think about leaving a lasting legacy that your kids and maybe even your grandkids can benefit from.
  • Business ownership. Are you an owner, partner or key executive in a business? A life insurance policy can give the company and its employees a sense of security as well as much-needed cash flow if you die.
  • Inheritance. If you’ve received an inheritance, re-evaluate your coverage.
  • Financial assets and plans. Now that you’ve gone through your wealth-building phase, you probably have a few financial assets to your name, such as a home, vacation home, boat or trust. Factor those in, along with any other savings you may have, like a 529 plan. To protect yourself, keep your retirement planning separate from your life insurance.

Case study

As you’re comparing life insurance policies, you’ll notice the prices between policy coverage can be steep. On the flipside, you’re probably at a stage of your life where $50 to $100 a month doesn’t put a huge dent in your savings.

If you’re undecided about how much coverage to buy, this case study might put the policies into perspective.

Let’s look at a 59-year-old nonsmoking woman. Based on our research, a $250,000, 20-year term policy with Protective Life, one of the cheapest life insurance providers, tends to cost $70.52 a month. To increase that coverage to $500,000, that same provider might charge $126.42 a month — a price difference of $55.90 for double the coverage.

To boost coverage to $1 million, there’s more of a price hike, with Protective Life charging $241.23 a month.

Bottom line

Most people in their late-50s go for a term life policy that takes them up until their retirement, when they’ve paid off most — if not all — of their debts. Typically, this is 10 or 20 years. Others treat life insurance as part of their estate planning and choose a permanent policy that builds up cash value over time. If you’re in good health, you’ll probably be offered a good premium for $250,000 or $500,000 in coverage. After 60, life insurance providers are less lenient.

The best life insurance policy for you is the one that’s tailored to your needs. Don’t take shortcuts — compare life insurance policies to find the right fit.

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Frequently asked questions

If I’m still alive at the end of my term life policy, does my beneficiary receive any money?
No. A term life policy doesn’t build cash value. Permanent policies, like whole life and universal life, do.

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