Life Insurance in your 50’s – 9 Compelling Reasons to Take Action

People that are over the age of 50 may wonder whether or not it’s worth it for them to get life insurance.  When you are between the ages of 50 and 59, can you even get life insurance?  If you do get it, what will it cost?  Is life insurance in your 50’s necessary for your family Here’s a thorough guide about life insurance for 50-year-olds and why you should get one now.


The short answer to this is yes.

At one time, it was seen as common sense to drop your expensive whole life insurance when you reached your 50’s as retirement would be right around the corner.  Along with retirement comes a reduction of life’s expenses such as your mortgage, major debts, and taking care of children.

Since life insurance was designed to provide for those expenses in case of death–the lower the expenses–the less you need life insurance.

Today though people are living longer, working longer, many are still paying mortgages, and many are helping out adult children.  Does this sound like you? Without life insurance, you’ll be leaving your loved ones in a mess if you die in your 50’s.

Want to know more about life insurance specifics for people aged 50 – 59?  Read on.  If you already know that you need protection for your family and would like a free, no-obligation quote, hit the button below.

Here is a handy guide to this article, feel free to head directly to the section you need.


The types of insurance available to you at the age of 50 are term life insurance and permanent life insurance.

Term life insurance will have the lowest premium for you and is often seen as a vehicle for paying out the debt that you may leave behind for your spouse or children. It will not have any cash value, will not pay you any dividends, and if for some reason you surrender the policy, you will not receive any money back for it.

With term life insurance you’ll have the same premiums and death benefits for the period of time purchased, such as 10, 20, or 30 years. Once this term is up, your premiums will usually increase dramatically, so it’s best to match the term up with your needs.  For example, with 20 years left on a mortgage, consider a 20-year term.

Permanent life insurance has a higher premium but offer more than term life insurance. This is often an option when you’re looking to leave behind an inheritance for your children, or you know that your spouse will not be receiving any spousal benefits to live on. These types of insurance plans often build up cash value, may offer dividends payments, and if surrendered, you will receive the cash payment for the policy that has been built up.

Also, this cash value can be used to pay the premiums on the policy in the event of an emergency.


1. You Are Still Working

Income replacement is the #1 reason for life insurance.  Most couples in their 50’s are still working, and plan on working past the normal retirement age of 65.

The good news?  Most people working over the age of 50 are satisfied with their job and enjoy their work.  Which is good, because older families have more debt than ever before (see #2) and rely on that income like never before.

If you are still working, now is the perfect time to get life insurance.

If you’re in your 50’s and still thinking that it’s not the right time to get your insurance, you’ve been missing out. Most companies won’t give you a 30-year term as early as 55, so while you’re still on the bracket of eligibility, it’s time to make a move!

Are you interested in a policy with no medical exam? Many 10-year term plans no longer require a medical exam when you hit your 50’s. However, most life insurance providers won’t let you get that 15 or 20-year terms without taking a medical exam. What if you’re a smoker and have some medical issues you are not aware of? Taking a no exam policy will prevent those skeletons from coming out of the closet.

For our Canadian readers, there is a great company called Canada Protection Plan who specializes in no-medical, simplified issue life insurance. You can still get a no-exam policy from them in your 50’s, and they are one of the top providers in Canada.

Basically, if you are still working and someone depends on your income, life insurance is a must. You can accomplish your income replacement goals with a simple term policy, and 15 to 20-year term policies are still very affordable when you are in your 50’s.

2. You Still Need Life Insurance Even If You Still Have A Mortgage

Many homeowners over the age of 50 still have big mortgages to pay.  You may be among them.

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David Plunkert @ NY Times

If you purchased a house in your 30’s and did not refinance, that home would be free and clear as you neared retirement.  You could collect social security and live out your days in a mortgage-free family home.

That was the old thinking, anyway.

Because of the continuing problems of the housing boom and subsequent recession, a home that is completely paid for by retirement age is less likely.  More and more homeowners over the age of 50 have mortgage debt, and that mortgage debt is higher than ever before.

Think about what your family would do with the home if you died.  Would they move out? Would they stay?

Could they afford to stay with only one income?

Term life insurance to cover the remaining mortgage balance is very affordable.  If you die while the policy is in place, it can pay off the house and keep the family home in the family.

3. You Own A Business

Many business owners are over the age of 50.  Heck, some of the best businesses ever were started by people older than 50.

The founders of McDonalds and Coca Cola were aged 52 and 55, respectfully when they started their companies.

Today, about twice as many entrepreneurs are over 50 as are under 25.  So it’s obvious there are plenty of great businesses in the hands of people in their 50’s.

To pass those businesses on, they need continuation plans, key man life insurance, and buy-sell agreements.

If you are an owner or a key employee of a business, how quickly would your business crumble following your death?

How would the business make up the income that you generate?  Would the business have enough capital to survive as they search for a successor?

Where would the funds come from to sell the business to other business partners (if you have such an agreement)?  Would your family be rewarded for your hard work?

Key person business insurance is one of the main reasons to purchase life insurance in your 50s. These company-funded plans are crucial to keep the business going after the death of someone essential.

Other points to consider: Instead of speaking about death entirely, what about if you were disabled and couldn’t work in your business?  Who would pick up the slack? 

Is it time to consider disability insurance for self-employed persons?

4. Multiply The Inheritance For Your Family Or Your Favorite Charity

Many of our clients in their 50’s are looking at their children and grandchildren and they want a bright future for them.  Life insurance can help leverage your legacy.

There are many plans with income provider options that will pay an income to your heirs long after you are gone.  You can take taxable money and slowly transfer it to your loved ones through life insurance tax-free.

For instance, let’s assume you would like to leave $100,000 to your heirs.  You could leave the inheritance in traditional taxable assets like CDs, Cash or stock.

OR –

You start your plan at age 50 and leave it little by little to fund a guaranteed life insurance plan.  This will leverage your dollars almost 4x, using the example below.


Jarrod S., aged 50 placed $400,000 in permanent life insurance and named his wife and children beneficiaries. His policy cost $400 per month.

By age 70, he has contributed $96,000 to the policy. At age 86 he withdraws $96,000 from the cash value of the policy tax free.  This essentially put the premiums he paid back into his pocket.

Client Dies at age 91 with over $300,000 in life insurance protection to pass on to his family (also tax free).

Life Insurance in your 50s leverage your legacy life insurance age 59 life insurance age 58 life insurance age 57

As you can see, it takes some planning, time and commitment.  However, life insurance is one of those rare vehicles where you can positively impact your family long after you are gone.

What would $300,000 mean for your family or your favorite charitable organization?

5. Estate Tax or Income Purposes

Estate tax exemption is $5.49m per person in 2017 (or almost $11m for married couples). If your estate is sizable, life insurance proceeds are tax-free and provide a convenient way to pay Uncle Sam.

It is advised to set up these policies in an irrevocable life insurance trust (ILIT), though you need to consult an estate attorney to construct the best trust for your family’s needs.  If you have a sizable estate and if you are the owner of the policy, proceeds could be subject to the estate tax.  That is why many clients in this situation name the trust as the owner, thereby avoiding the estate tax hit.

Time to remind you that Heart Life Insurance does not provide legal advice, we are not lawyers, and we do not play lawyers on the internet.  Do your due diligence.

Life insurance for your estate is also necessary to provide cash flow if the estate is not very liquid (real estate) or if the estate has other cash flow needs (normal business expenses associated with a family business).

Your family will be putting the personal pieces back together after your death.  Where is the money going to come from to put their financial puzzle back together?

6. The Empty Nest Is Not So Empty

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According to research from the Pew Research Center, for the first time in the modern era more young adults are living at home versus living with a spouse or partner elsewhere.  To put this in perspective, in 1960 62% of people in the same age bracket were out of the house. Now that number is 31%.

Where is this change coming from?  There are differing opinions on marriage today versus 50 years ago, and people are waiting longer to get married.

More and more young adults are also going to college, and they are going to college for longer than generations before.

No matter the cause, look around your household.  It is as likely as not that your children will be sticking around longer than you plan. . . and that’s OK!

Keep life insurance in force in your 50’s, because even though your kids may be growing up, they still may depend on you to provide.

7.  Funeral And Final Expenses

Planning out your funeral and final wishes is a great idea.  Get a living will.  Let your loved ones know how you want to be remembered, and purchase a small life insurance policy to cover those final expenses.

For your final expenses, consider this:

  • An average funeral today costs about $8,500.  Add on fees for a cemetery plot, monument, flowers, and obituaries, and this cost is almost $15,000.  Keep in mind, we are talking about today’s dollars.  Toss in 3% inflation, and your costs will exceed $36,000 in 30 years.
  • Will your family miss work when you die?  Who is going to sort through all of your stuff?  How long is that going to take?
  • Also, where are you going to die?  It’s convenient to die in a hospital or in your home, however what if you die on vacation many thousands of miles away from home?

It’s important to recognize that there are costs we cannot even fathom categorized in “final expense.” However, life insurance is still very affordable in your 50’s, so you can be prepared no matter what your final expenses are.

8. Increase Your Pension Or Annuity Payout

Do you have a pension or defined benefit retirement plan?  Are you healthy, married, and nearing retirement?

This strategy is often overlooked, however, single-life payouts on pensions are higher than joint-life payouts.  If you are healthy, it makes sense to explore this option.  Often you can get more take-home income and more inheritance options from the single life annuitant payout combined with life insurance.


Jack is a healthy male client about to retire at age 59.  His wife Diane is 55. Both of their parents are still alive, and their grandparents lived into their late 80’s.

His pension plan gives the option of either a single life payout option of $5,000 a month, or a joint and survivor payout option of $3,000 per month.

If he selects the single life option, he will receive and additional $2,000 more per month for the rest of his life or $24,000 more per year. However, Diane will receive nothing if Jack dies first.  What if Jack dies a year into retirement?

If we use this life expectancy chart from social security, we know that Diane is likely to live another 30 years to age 85.  We also know her parents are still alive and her grandparents lived into their late 80’s.

In this case, we would plan for income replacement for about 40 years to pay her until age 95.

Income for Diane, $3,000 per month for 12 months is $36,000.  Multiply that by 40 years and we arrive at $1,440,000 in total life insurance to place on Jack.

Would a pension max plan work for Jack and Diane?

In this case, yes.  Jack is healthy, so that keeps the cost of life insurance down.  Diane’s need for income will decrease as she gets older, so we can ladder term policies to maximize Jack’s pension and protect Diane’s income at the same time.

Pension Max Strategy Illustration, 59-Year-Old Nonsmoker, Standard Plus.

Life Insurance PolicyCoverageMonthly Cost
10 year Term$500,000$161.00
20 Year Term$500,000$290.38

Jack and Diane get $2,000 more per month and use about $1,200 to purchase life insurance on Jack, thereby coming out $800 per month ahead on their pension maximization plan.

What if Jack dies first?

Diane cashes in on the life insurance policies in force to replace the income from the joint survivor option ($36,000 per year).

What if Diane dies first?

Jack can cancel the policies and take the full $5,000 pension income for the rest of his life. Or he can name his children beneficiaries and pass on the life insurance proceeds, an option that is not possible with a straight pension.


It is best to run very conservative numbers with your financial planner before setting one of these pension max plans up.  You do not get another opportunity to change your pension payout.

Also, they work best for healthy plan owners who are nonsmokers.  If your health is failing, the cost of life insurance outweighs any potential savings and it is better to take the joint plus survivor option.

9. Cover Some Of Your Long Term Care (LTC) Needs With Life Insurance

Long term care is on many of our clients’ minds, however, long term care insurance can be costly.  The health underwriting guidelines for LTC insurance policies are also tougher, making it more difficult to qualify for a policy if you have certain health conditions.

Thankfully many life insurance policies also have LTC-like benefits with the policy as an inexpensive rider (or free, in some cases).

For example, one popular term policy allows 2% per month of the death benefit if the policy owner needs help with daily activities, like bathing and dressing due to chronic or critical illness.

$250,000 policy would yield $5,000 in monthly benefit if needed.  For a 50-year-old healthy male, that policy would be about $110 per month on a 30-year term.

10.  BONUS TIP – These People Probably DO NOT Need Life Insurance In Their 50’s

Basically, the self-insured do not need life insurance in their 50’s.  They have a significant retirement nest egg, very little (if any) debt.  They could replace their income with investments if a husband or wife died.

If they have children, they are independent adult children.  Their estate is also small enough where there is no estate tax.

Also, if you are single in your 50’s and have enough saved away to cover your final expenses, you can probably skip the life insurance conversation.


You are likely still earning money and likely still paying down debt.  Your family still needs your contribution to the household, and your kids are still at home.

Face it, you need life insurance!  What would your family’s life look like tomorrow if you died today?

Life insurance in your 50’s is still very affordable. Your age affords many options, both in term life insurance and in permanent life insurance, so do not put the decision off any longer. You still have options for life insurance without a medical exam.  Your health is as good as it will ever be right now.

Speak with one of our underwriting experts so we can get to work for you today.