Do you still need life insurance if you're over 50? Find out why you might still need cover.
As you reach the half century mark you're financial commitments will certainly change. For example your children may have moved out of home. However, this doesn't mean you shouldn't consider life insurance - it's designed to cover the financial commitments that are still there (e.g. your mortgage) if something serious happens to you.
Life insurance cover can give a financial benefit to any dependent children or your spouse in the event of your death, terminal illness or even serious illness and injury.
Seniors life insurance for over 50s
The most common type of life insurance for those over 50 is death cover, which provides a lump sum payment in the event of your death or if you have been diagnosed with a terminal illness and have less than 12 months to live. Some insurance providers will offer death cover to applicants up to 75 years of age, usually with a stepped level premium structure. The maximum entry age varies between insurers, so it's important to read the Product Disclosure Statement closely to find more information.
Why should I consider life insurance if I'm over 50?
- Statistically those in their 50s are most likely to make a claim for insurance
- The lump sum benefit of a trauma policy can help ensure you don't endure financial hardship if required to get long term treatment
- Future proof your retirement savings
Can I get cover after 50?
It's still possible to find affordable cover without sacrificing the quality of protection. A simple way to get started is to speak to a qualified consultant.
Securing the best life insurance* deals if over 50
While getting life insurance cover in your 50s is fairly easier these days, careful deliberation and the weighing of your options are critical exercises to help you get the best deals and avoid further regret in the future. Here are a few simple steps for you to consider when purchasing life insurance policies for over 50s:
- Be aware of the terms and conditions. Be sure that you are getting what is offered to you in order to avoid overpaying for a policy that doesn't offer the correct protection. Look out for unnecessary features that might not be relevant to your situation. Do not hesitate to ask questions on any details on the policy that are not clear to you. Also keep in mind to read the fine print because there might be similar policies offered by various providers but the coverage and cost are not the same.
- Understand the features and benefits on offer. Most life insurance policies for people over 50 have certain limits. One of these limits is the length of the policy. Where you can get up to 30 years when you get a policy at a younger age, seniors life insurance is mostly set between 10 and 15 years at most.
- Consider your health. Although some insurance providers may not require medical tests when you apply for seniors life insurance, most still do. Any pre-existing medical conditions, lifestyle habits, and driving records will come into play and can significantly affect the cost of your premiums.
- Eligibility for discounts. When applying for cover, consider coverage for your partner/spouse as well and you may be eligible for a discount on your premiums. Insurance providers will generally also offer discounts if you pay your premiums on a yearly basis.
- Consult with an experienced insurance adviser. If you are not sure which life insurance plan is most suitable to your needs and within the budget that you can afford, consider seeking advice from an insurance consultant. They have knowledge of the market and the ability to provider recommendations on the right policy for you with competitive prices.
What types of life insurance features are useful for people over 50?
Some of the features and options available with life insurance for applicants age 50 and over include:
- Terminal illness benefit. If you're terminally ill, with no more than 12 months to live, a benefit amount is payable to help you and your family manage your financial affairs.
- Funeral expenses benefit. Most insurance providers offer a specified amount of cover payable in advance to cover any funeral related expenses.
- Financial planning benefit. The cost of obtaining approved financial planning advice upon the payment of a life cover benefit is covered by some insurance providers.
- Guaranteed future insurability. You can make amendments to your life insurance cover should your circumstances change due to a specific live event, and you're not required to provide further medical evidence.
- Interim accidental death cover. You may be eligible for an interim accidental death cover while your life insurance application is being assessed by the provider and a benefit amount is payable should anything happen to you at this time.
Other types of insurance to consider if you are Over 50
- Income protection insurance. Income protection insurance is designed to provide you an alternative source of income if you are unable to work as a result of an illness or injury. It generally provides a monthly benefit of up to 75% of your monthly income and you can tailor your policy to suit your needs. You can generally apply for an income protection policy you up to 59 years of age, and your cover will continue until your 65th birthday.
- Critical illness insurance. Critical illness insurance provides a lump sum benefit upon a diagnosis of a life-threatening medical event, as listed in the policy. The medical conditions covered vary between providers but often include cancer, heart disease, stroke and major organ transplant. Critical illness cover can also provide you with protection in specific areas where your health insurance cannot extend its cover. The benefit pay can give you access to the best medical treatment and rehabilitation facilities anywhere in the world. You will be eligible to apply for critical illness insurance if you are between 50 to 59 years old, and you will be covered until you turn 70 years old.
- TPD insurance. Total and permanent disability (TPD) insurance provides a lump sum benefit in the event that you are permanently disabled and unlikely to be able to work ever again. The proceeds from TPD cover can be used as a source of income, to keep up with any living expenses and pay off any debts you may have. Applicants over 50 years old can apply for TPD cover, up until age 60. Cover will continue up until you turn 70 years, although this may vary between providers.
How to keep the cost down when applying for critical illness or TPD
As you enter your 50's, you may find that what you are quoted on a policy increases. This even more so the case when you add critical illness insurance and TPD cover. One possible way to save on cover is to combine your cover. For example you could apply for:
- $1 million in life insurance cover
- But you get $250,000 in Critical IllnessInsurance cover (that gets take out from that $1 million if you make a claim)
- And get $250,000 in TPD cover (that gets take out from that $1 million if you make a claim)
Maximum entry age for different types of life insurance for people in their 50s or over
1 = Maximum age may vary between insurance providers
# = Maximum age may vary depending on the premium structure you have opted for - level or stepped premiums
^ = Maximum age may vary depending on the type of TPD cover definition you have chosen
How much does life insurance cost for someone over 50?
We analysed 10 life insurance policies to get a rough idea of how much it costs per month for a 50 year old.
|Brand||50 years old||Increases by||60 years old||Increases by||70 years old|
|TAL Accelerated Protection||$82.58||$233.22||$315.80||$850.12||$1,165.92|
|Asteron Life Complete||$79.69||$239.03||$318.72||$801.95||$1,120.67|
|Zurich Wealth Protection||$84.23||$223.72||$307.95||$904.94||$1,212.89|
|AIA Priority Protection||$77.41||$240.69||$318.10||$898.87||$1,216.97|
|BT Protection Plans||$98.21||$242.22||$340.43|
|Brand||50 years old||Increases by||60 years old||Increases by||70 years old|
|TAL Accelerated Protection||$61.60||$139.93||$201.53||$479.51||$681.04|
|Asteron Life Complete||$60.59||$149.01||$209.60||$521.81||$731.41|
|Zurich Wealth Protection||$63.74||$137.71||$201.45||$552.58||$754.03|
|AIA Priority Protection||$54.99||$142.55||$197.54||$563.86||$761.40|
|BT Protection Plans||$72.68||$147.33||$220.01|
Quotes taken from finder's life insurance engine on November 2018. Prices only a rough guide and are subject to change.
The cost of cover will is based on the level of risk the applicant presents to the insurer and is dependent on a number of factors including;
- The applicants age
- Nature of the applicants occupation
- Any pre-existing conditions that the applicant has
- Whether the applicant smokes (smokers can pay as much as double in premium payments)
Can I apply for life insurance without having to take a medical exam?
You may be required to provide evidence of your previous medical history, which include blood tests and medical examination, when you apply for life insurance policies, such as life cover, TPD insurance, trauma cover and income protection. This is to provide the insurance providers with an accurate indication of your current health status, so that they are able to determine the level of risk you carry and the premium rates you pay. If you are looking to apply for life insurance over 50, without going through a medical exam, you may want to consider direct life insurance instead.
On the other hand, you are not required to undertake any blood or medical tests when you apply for funeral insurance. There is a guaranteed acceptance, provided that you satisfy the application criteria.
What if my application for cover has been refused and I am over 50?
It is also possible to have your life insurance application reassessed by the provider. You may be required to provide additional medical evidence, so the insurer can further assess whether they are able to provide you with cover and take on the risk that you pose.
If you find that you are still unable to get cover and your application has been denied, consider other alternative option to life insurance, such as funeral insurance that offers guaranteed acceptance, or direct life insurance that does not require medical underwriting at the time of application.
Life insurance is not only for the young, but for seniors as well. In order to get a good deal on life insurance if you are over 50, take time to shop around and compare policies and prices from different providers. Consider speaking to an insurance expert for recommendations on different life insurance options for people who are 50 years of age or more.
* The offers compared on this page are chosen from a range of products finder.com.au has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking financial advice and consider your personal financial circumstances when comparing products.