Over 55? It could be time to review your life insurance.
Trying to find life insurance when you're over 55 can be a bit more difficult than if you'd taken out cover when you were younger. While it's true that the life insurance premiums of people who are in their 50’s are higher than those who are younger, it doesn't mean that it's impossible to find cover that will still fit within your budget.
Thanks to improvements in technology, Australians are living healthier and as a result living longer. According to the Australian Bureau of Statistics (ABS), the life expectancy of Australians has risen overtime to 84 for females and 79 for males. That said, it just means that there are more reasons to consider having life insurance in place, especially if you 55 years old or over.
Is it possible to find affordable life insurance if you're over 55?
Many life insurers offer life insurance policies designed for people 50 plus. If you're in good health, there shouldn't be any problem finding an affordable life insurance policy that suit your needs.
As the Australian market develops, insurance companies continue to improve their product offerings and as result, many have to ability to offer competitive premiums for those who are in their 50s. As an example, if you are a 55-year old non-smoker male in good health and you get $500,000 policy on a 10-year term, your monthly premium will be roughly $80. If you are a 55-year old woman in good health and do not smoke, a term life insurance policy worth $200,000 will cost you around $37 every month.
Life insurance quotes for applicants 55 years and over can vary from provider to provider. Therefore, to get an appropriate quote that are tailored to you, consider speaking to an insurance adviser to help you find suitable insurance options to your needs and at a price that you can afford.
What factors affect premiums for people over 55?
There are a number of different factors that can affect the cost of your life insurance policy if you are 55 years and over:
- Gender. Men often pay more in life insurance premiums than women due to higher risk for injury and death they are exposed to as they get older.
- Age. As with most insurance policies, your premium rates tend to be higher in the later stages of your life due to higher perceived health risks.
- Occupation. If you are still working at the time of application, your insurance provider will also take your occupation into consideration when determining the level of risk you carry. White collar workers, for example, pay less in premiums than blue collar workers that are often exposed high risk work environment.
- Health condition. You can benefit from lower premiums if you are generally healthy; however, you can expect additional loadings on your premiums if you have a pre-existing medical condition.
- Lifestyle. One of the greatest effects to the cost of your premiums no matter how old you are is your smoking habits. A 55-year old smoker, male or female, can pay nearly twice as much as a non-smoker. Other lifestyle factors such as alcohol consumption and your Body Mass Index (BMI) will also play a big part on the amount of premiums you pay.
- Hobbies/pastimes. Are you a little bit on the adventurous side? While you can take on any activities that take on your genuine interest, it is important to note that dangerous sports such skydiving, parasailing, or deep sea diving are considered as high-risk activities by most insurance providers.
Should you get level or stepped premiums?
The structure of your life insurance can have a fairly large effect on how much your monthly premium costs, such as:
- Level premiums. This premium is calculated at the start of the policy and stays pretty consistent through the policy as you age. It seems as if you are paying more than the stepped premium, however because it is ‘level’ it remains the same monthly payment, while the stepped increases. Depending on the length of time the policy is in force, this is the least expensive way to pay for life insurance over the longer term.
- Stepped premiums. These premium payments are low to start with, but increase over time, which goes up, based on your policy renewal, risk factors and can get costly. This is a good short-term life insurance policy because at the onset, the premiums are quite cheaper than the level premiums.
Both Level and Stepped Premiums are good choices; however, it is essential to consider your individual situation and whether you are taking a long-term policy or a short-term life insurance policy. Speaking with an expert can help you determine which is best for you.
Is funeral cover a suitable alternative to life insurance for Australians aged 55 and over?
If you are finding it hard to secure a life insurance policy due to your age and other restrictions, such as occupation and health, you may want to consider funeral protection insurance as an alternative.
Funeral insurance is a type of cover that provides a lump sum payment in the event of your death that can be used to meet your funeral expenses and any other related costs. Applicants can generally apply for a cover amount of $5,000 up to $30,000 and since you are not required to complete any medical exam, your application will have guaranteed acceptance.
Other types of life insurance to consider for people over 55
Aside from funeral insurance, there are other types of life insurance policies that you can consider when comparing different life products available in the Australian market. These include:
- Personal accident insurance. This type of cover provides a benefit payment in the event of an illness or injury and you are unable to work. You can receive your payout as a lump sum, in a monthly or weekly basis depending on the severity of your disability. Some select providers may also provide cover for death.
- Accidental death insurance. provides a lump sum benefit if you pass away as result of an accident.
Can I apply for cover life insurance direct if I am over 55?
For applicants over 55 years old, another alternative to consider is to purchase life insurance from a direct provider. With direct life insurance, there is little to no medical underwriting when you apply for cover. However, over the age of 55, you will generally be required to complete a medical questionnaire and your premium rates may be higher compared to an advice-based life insurance.
Direct life insurance is suitable for individuals over 55 who know what they are looking for out of their life policies. It is also generally more suitable for applicants with relatively good health - that is if you don't smoke, drink in moderation and no pre-existing medical condition.
To buy life insurance direct, you can apply over the phone or online. The first step is submit your enquiry for a quote and a direct insurance representative will be in touch with to confirm your details. Once your application is approved, your cover will be activated.
It is not impossible to find life insurance that suits your needs and situation even if you over the age of 55. It is important to compare different life insurance policies that are available on the market to determine the most suitable cover for you. When in doubt, you can always get some advice from an insurance adviser who have the industry knowledge and expertise to recommend suitable options tailored to your needs.