Alliance Income logo

Your Best Guide to Life Insurance Over 50 – Here Are Your Options

Feb 24, 2023 | Insurance, Life Insurance

Despite what many people think, age 50 is not too late to buy life insurance. People in their 50s might want to ensure that their families will be financially secure if they pass away.

Being in your 50s, you will have to pay more for a life insurance policy. However, several other things factor into the cost of life insurance. 

So today, Alliance Income is here to talk about the cost of life insurance for a 50-year-old.

Despite what many people think, age 50 is not too late to buy life insurance. People in their 50s might want to ensure that their families will be financially secure if they pass away.

Being in your 50s, you will have to pay more for a life insurance policy. However, several other things factor into the cost of life insurance.

So today, Alliance Income is here to talk about the cost of life insurance for a 50-year-old. 

Types of Life Insurance

50-year-olds typically have two options for life insurance: term and whole life insurance. 

Term life insurance provides coverage for a specific period while you pay monthly premiums. If you die during coverage, the policy pays a death benefit to your beneficiaries. The average length for a term is ten to 20 years, though you can find policies with terms up to 30 years. 

Term policies are beneficial because they have low, predictable premiums and straightforward death benefit conditions. However, term life insurance expires and doesn’t carry any wealth-building components.  

Whole life insurance, in contrast, provides permanent coverage as long as you pay the premiums. Whole life insurance policies also have a cash value investment component that accrues interest as you hold the policy. 

Whole life insurance usually has higher insurance premiums and more complicated payout conditions than term life insurance. The upshot is you can take out tax-free loans against the cash value or use the cash value portion to supplement retirement income. 

In Your 20’s, 30’s, 40’s, 50’s and Beyond, There’s a Life Insurance Policy for You

Speak to an expert.

Cost of Life Insurance for a 50-Year-Old

The average cost for a ten-year term life insurance policy with $500,000 in coverage for a 50-year-old is about $63 a month, or about $755 a year. Similarly, the monthly cost for a 20-year term policy with $500,000 of coverage would be about $83 a month or about $1,000 a year.

Whole life policies, in contrast, are more expensive. The average cost of a whole life policy with $250,000 of coverage for a 50-year-old is about $330 a month or about $4,000 a year. As you can see, the cost of a whole life policy is about four times the cost of a term policy. 

Below is a table showing the average cost for a 20-year term life insurance policy with $250,000 in coverage and a whole life insurance policy with the same coverage.

Gender and Age$250,000
20-Year Term Life Insurance
$250,000
Whole Life
Male, 30 Years Old$20/month$140/month
Female, 30 Years Old$15/month$120/month
Male, 40 Years Old$30/month$205/month
Female, 40 Years Old$23/month$175/month
Male, 50 Years Old$70/month$325/month
Female, 50 Years Old$53/month$280/month

Keep in mind these prices are averages, and your actual costs might vary.

Factors that Affect Insurance Costs

Aside from the type of policy, several factors can affect the cost of life insurance, including:

Age

Age is the single most important factor affecting insurance costs. All other things being equal, the older you are, the more expensive your monthly premiums will be. The rate at which premiums increase also increases as you get older. In other words, the cost difference between a policy for a 40 and 50-year-old is greater than the cost difference between a 30 and 40-year-old

Health

Health is another major factor affecting costs. If you have any underlying or current health conditions, you will have to pay higher premiums. Health risks and pre-existing conditions increase premium costs include high cholesterol, high blood pressure, kidney disease, or diabetes.

Insurance companies will also take into account family medical history. So if you have a family history of lung cancer, you may have to pay higher premiums. 

Smoking Status

Smoking status is the largest health concern that will affect premium costs. While it’s still entirely possible to secure a life insurance policy as a smoker, premium costs for smokers can be nearly double the cost for non-smokers for the same policy. Most insurance companies require you to quit smoking for 12 months before they will consider you a non-smoker for insurance coverage. Most insurance companies count vaping or cannabis usage as smoking. 

Occupation

If you work in a high-risk occupation, your premium costs will most likely be higher. Each insurance company will have different definitions, but high-risk occupations often include:

  • Logging
  • Mining
  • EMS and Law Enforcement
  • Construction
  • Firefighter
  • Fishing

Lifestyle/Hobbies

Similar to occupation, insurance companies consider your hobbies and lifestyle. Participating in risky behaviours like extreme sports or MMA can increase premium costs. You can also get a penalty on insurance premiums if you have infractions on your driving record.

Gender

Most insurance providers also take gender into account. Women, on average, have a higher life expectancy than men so they can pay anywhere between 10% to 20% lower monthly premiums. Some insurance providers will consider gender identity while others consider sex-assigned-at-birth. 

Best Life Insurance for 50-Year-Olds

At this point, you’re probably wondering: What kind of policy is the best life insurance for a 50-year-old?

The answer depends on your finances and your family situation. Many people favour term life insurance policies because they have predictable premiums, high coverage limits, and straightforward distribution requirements. You can also add riders and other add-ons to get more benefits from your policy.

The downside of term policies is that they expire, and you’ll most likely have to pay higher premiums if you renew the policy after the expiration date. Also, most insurance companies will not sell term policies to people over the age of 75.

Whole life insurance has higher premiums but never expires, so it can be a good choice if you have an above-average income and can afford the premium cost. Whole life insurance also has the cash value portion of premium payments, which you can use to supplement retirement income. 

The main downside of whole life policies is the cost. Monthly policy premiums for whole life insurance can easily be five times the cost of term life insurance. Additionally, the underwriting process for whole life insurance is more complex and often takes longer.  

What If I Have Poor Health?

If you are 50 years old and cannot qualify for a term or whole life insurance policy due to health conditions, you have other options. Guaranteed life insurance has a set death benefit and does not require a health questionnaire or medical exam. Guaranteed policies have high premium costs and low coverage limits, but they are a good last-resort option if you are older and have poor health. 

Reducing Life Insurance Costs 

Many 50-year-olds might not have excellent health or have some underlying conditions, meaning they will have to pay higher premiums. However, there are some ways you can reduce the costs of life insurance. 

  • Give up smoking. Not only can you cut premium costs by a significant percentage, but quitting smoking can greatly increase your life expectancy. 
  • Eating healthily and getting enough exercise will lower life insurance premium costs.
  • Buying too much insurance can ultimately hurt your financial health. You can speak to a financial analyst who can assess your income and lifestyle to find a policy that maximizes the return on your investment.  
  • You and your spouse can combine separate life insurance policies into a cheaper single policy 
  • Don’t just grab the first policy you see. You can compare rates to find the best policy that suits your needs. 
  • Term insurance has high coverage limits and costs less than whole life insurance.
  • Most insurance companies will give you a discount when you pay premiums annually instead of monthly. 

Life Insurance for 50-Year-Olds FAQs

Below are some of the most common questions we receive about life insurance for 50-year-olds.

Many insurance providers recommend that you purchase at least ten times your annual salary in life insurance coverage. You can also add your debt and future living expense, as well as the cost of your children’s college educations, to estimate the total amount of coverage you need.

Yes, you will have to take a medical exam to purchase term or whole life insurance. Insurance companies use medical exams and health questionnaires to estimate coverage risk. Guaranteed life insurance policies do not require a health examination but have significantly higher monthly premiums and lower coverage limits.

Yes, you can use life insurance benefits to pay for funeral costs and other end-of-life expenses. Most companies allow you to purchase a rider to access insurance benefits while still alive for end-of-life care.

No, death benefits are not taxable in Canada. If you die, your beneficiaries will receive the entire amount of the death benefit tax-free and can spend it however they want.

If you are not over the age of 75, you can renew a term life insurance policy after it expires. However, the insurance company will require you to take a new medical exam, and premium costs will rise.

Even if you don’t have dependents, life insurance for a 50-year-old can still be a good idea. Life insurance can cover outstanding debts when you pass away, or you can give your benefit to relatives. You could also donate the death benefit to a charitable organization of your choice.

Related Article

Every Canadian needs life insurance, and this article explains the top 3 benefits.

Shop and Compare Life Insurance Policies Today!

Regardless of age, investing in a life insurance policy provides a safety net for family members and loved ones left behind in case of an unexpected death. Shopping for life insurance doesn’t have to be difficult when you work with Alliance Income. Our expert advisors take great pride in searching and comparing policies from the most well-known providers in Canada. We make shopping for life insurance quick and easy.

Fill out our form to receive an instant quote!

INSURANCE OFFERS & PROMOS


Online Life Insurance Quoter

Secure yourself with affordable life insurance from Canada’s top providers and be protected in minutes.

Manulife Health & Dental Plan

Help protect yourself and your family from regular health and dental costs.

Manulife Travel Insurance Plan

Affordable travel insurance for Canadians, visitors to Canada & students.

INSURANCE 101


CATEGORIES



Get the Best Insurance Rates and Offers

Get customized quotes from experienced advisors and brokers who work for you.

Insurance Shopping? We Can Help!

We make finding the right insurance coverage fast and simple by connecting you with the best insurance providers in Canada. Browse options, compare rates, and more.

GET A QUOTE NOW TO GET YOU STARTED!

Health Quote Form
Insurance companies partners banner logo black

Related Articles