Term Life Insurance for Men Over Age 50

Over 50 yr old man - Life InsuranceMen, if you are over the age of 50 years old and need term life insurance, that’s great.  I’ve written this post just for you!

The primary reasons men purchase life insurance in their fifties are:

1.  Family Protection

2. Business Protection

3. Estate Planning

Let’s cover each of these below in terms of how much protection you need, and which type of policy suits you the best.  Please note if you are unfamiliar with the various options available to you, you may want to visit our article about Types of Life Insurance, and you can also use our handy calculator to help determine How Much Life Insurance You Need.

Term Life Insurance for Family Protection

Most of our clients over 50 years old who need coverage are purchasing it because they are still working, and need to protect their wife or children from financial ruin in the event of their demise.  If we take the example of a 51 year old man who makes $70,000 per year and has a $500,000 mortgage, here’s what I would recommend.

This man will probably work another 15 to 20 years before retiring.  That’s over 1 Million dollars his wife would miss out on if he were to die unexpectedly.  In his case, I don’t normally add in the balance of the mortgage, but recommend replacing his income for at least 15 years.  This way, his wife will be able to continue paying the mortgage and other bills if he dies.

If we assume a 3% inflation, and 6% earnings on the funds, our handy life insurance calculator shows he needs approximately $865,000 to provide an annual income to his wife of $70,000 for 15 years.  So in his case, we would probably look at quotes in the $750,000 to $1 Million range.

Business Life Insurance Over 50 years Old

Another popular reason men purchase life insurance in their fifties is for business insurance needs.  The most common business insurance policies are sold for:

  • Key Man Insurance – If you own a business with a key executive, board member, or salesperson who your business just could not survive without, your business should consider taking out a policy on that individual.
  • Buy-Sell Agreement – Many partnership agreements mandate life insurance be taken out on each partner for a quick and easy buyout in the case of one of the partner’s passing.
  • Non Qualified Deferred Compensation – Many owners set up cash value policies for themselves (executive bonus plans) and for their employees, since they are so simple to administer and to comply with ERISA.  Plus the plans can discriminate between which employees will receive the benefits.

You won’t use the life insurance calculator to determine the amount of coverage needed in the above situations.  For partnerships, the amount is typically already pre-determined in the buy-sell agreement.  In the case of key man insurance, the value of the employee or executive may be measurable, in which case 5-10X annual production is appropriate.  But in the case of a founder, director, key board member, etc., their value may be more intangible, and will depend if your company has planned for an unexpected death, has a succession plan in place, etc.

For company deferred comp plans, the level of death benefit is usually irrelevant.  Instead, a policy is usually chosen for its cash accumulation features and outlook.

If you own a business and have any of the needs above, call us at 877-996-9383 or you can get started by filling out the quote form to the right.

Estate Planning

When I refer to estate planning, I’m speaking specifically of advanced planning you may do with your attorney to provide for liquidity upon death, as well as putting a life insurance policy in place in preparation for estate taxes.

We don’t typically deal with this level of planning for individuals who are in their 30’s or 40’s, as under current estate tax law, and estate is not taxable at the federal level until it is valued at over $5 million dollars, and you can imagine that very few individuals in their 30’s and 40’s have accumulated that sort of money.  But we do get quite a lot of estate planning type cases from people over 50 years old, many of whom have done well in business or real estate.

Let’s take an example of a wealthy, 55 year old single man, who will enjoy a estate tax exclusion amount of $5 million dollars upon his death, per C. Tucker Cheadle, a renowned California trust attorney, and how life insurance can help him.  If we assume he has a net worth of $6 Million dollars, the excess $1 million above the estate exclusion amount would be taxed at a federal rate of 35%, according to Cheadle, if this man were to die.  That sort of estate would generate a $350,000 tax bill.

So our 55 year old gentleman has two choices now.  Will he allow his estate to be reduced by $350,000 upon his death?  That’s his first choice.  Or alternatively, if he is a healthy non smoker, he could purchase a guaranteed universal life insurance policy with a $350,000 death benefit for as little as $3,708 per year, which would generate an tax free, cash benefit of $350,000 upon his death.  (Please note most people use some sort of permanent policy for estate planning needs, rather than term life insurance).

With proper planning, even the $350,000 death benefit would be separate from his estate, effectively solving his estate tax problem.  Even if our 55 year old lives to age 85, he will have only paid $111,240 in premiums (thereby reducing his estate value by the same amount), and paying his estate tax bill for pennies on the dollar.

Questions for Men Age 50 and Older

Please feel free to contact us with your questions at 877-996-9383.  You might also see C. Tucker Cheadle’s article on gifting, trusts, and avoiding estate taxes here.

No Exam Life Insurance

If you need to buy term life insurance quickly and want to do so with the minimal amount of fuss, we have the solution you are looking for right now.

If you are relatively young, and are in reasonably good health you can buy term life insurance right away and without having to take a medical exam.

You can qualify even if you smoke.  However, non-smokers will get the better rating of Standard Non-Nicotine rates while smokers may qualify for the next best rating of Standard Nicotine.

As a smoker, your monthly premium will be slightly higher but you can still get term life insurance without having to take a medical exam.

How Much Term Life Insurance Can I Get Without a Medical Exam?

If you are between the ages of 18 – 65 and qualify for a quick decision without having to take a medical exam you can buy between $25,000 to as much as a $250,000 term life insurance policy.

What Length of Term Can I Buy Without Taking a Medical Exam?

It depends on your age but it breaks down to as follows

10 Year Term available to those aged 18 – 65

15 Year Term available to those aged 18 – 60

20 Year Term available to those aged 18 -55

30 Year Term available to those aged 18 – 45

These term policies are renewable to age 95.  You may also be eligible for additional life insurance riders such as:

Dependent Child Rider – Coverage up to $25,000 and expires when the child reaches a certain age such as age 23, or you, as the insured, reach a certain age such as age 65.

Accidental Death Benefit Rider – This is generally issued only between the ages of 18 – 60, and you get coverage for between $25,000 and $250,000 with a general expiry at age 80.

How Will a Decision be Rendered?

The company will review the application you submit and you will be advised simply as to whether you are accepted or rejected by the insurance company.

How Do I Qualify?

To qualify you must be a U.S. citizen and provide some nominal proof of your citizenship such as a driver’s license.

You must answer a medical questionnaire such as the following:

You must answer No to the following questions to qualify.

1. Have you been diagnosed as having AIDS (acquired Immunodeficiency Syndrome) or ARC (Aids Related Complex) or tested positive for HIV (Human Immunodeficiency Virus)?

2. Are you waiting for a diagnosis, or have you been advised to have a surgical operation, diagnostic test or medical or mental evaluation that has not been completed?

3. Have you requested or received any Worker’s Compensation or any Social Security disability benefits?

4. Do you currently take more than 2 prescription medications for pain; or do you consume on average, more than 3 alcoholic beverages per day?

5. In the past ten years have you received any treatment, medical advice or medical consultation for:

  •  diabetes or elevated blood sugar; cancer (excluding basal cell or squamous cell carcinoma of the skin);
  • stroke, transient ischemic attack (TIA or mini-stroke); emphysema; chronic bronchitis or chronic lung disease;
  • major depression or anxiety that required psychiatric treatment;
  • bipolar disease or mood disorder; schizophrenia, Alzheimer’s disease, dementia;
  • rheumatoid arthritis, paralysis;
  • and degenerative muscle or nerve disease or disorder; alcohol or drug abuse;

OR any disease or disorder of the following: heart, aorta, coronary arteries, peripheral vascular system, blood, liver, pancreas, kidney (other than kidney stones) brain or connective tissue? continue page 2……

What Women Need to Know about Life Insurance

Life Insurance for WomenAt Huntley Wealth Insurance, we help males and females alike purchase affordable term and whole life insurance to provide valuable protection for their families, businesses, and estates.

While the name of this particular website intends to attract a male audience, we DO provide quality advice and pricing for women needing life insurance as well.

Why Women Need Life Insurance – And Why They Typically Don’t Have It

At Huntley Wealth, approximately 30% of our life insurance clients are women.  This statistic speaks to the importance of the working wife and/or mother in modern times.

Today, many women provide a valuable, irreplaceable income for their families, which, if lost due to sudden death, would leave these wives’ and mothers’ families having to cope with one less income.

That’s where life insurance comes to the rescue.  Life insurance is commonly used to insure future earnings.  For example, if a woman earns $75,000 per year, and will do so for the next 20 years, she might purchase a 20 year term life insurance policy with a death benefit in the range of $1 Million to $1.5 Million.  If the death benefit earned 5%, her surviving husband or children could draw 50K to 75K from the death benefit to pay bills, the mortgage, and provide for needs without the funds ever depleting.  What would the surviving family have done without these funds?

The problem with modern families is that women generally have less life insurance than men, according to MetLife’s most recent “Employee Benefits Trends Study” in 2011.  The study also showed that women are more concerned about the impact their sudden death could have on their families than men, which is wonderful, and in my opinion, as a man with a wonderful, loving wife, I can certainly understand that.  So why aren’t females properly insured?

The key problems, or myths, I think, revealed in this study and others have to do with cost and simplicity of the life insurance process.  A study from Nielsen/Claritas proved that 44% of high income women (earning in excess of 50K per year) believe that life insurance costs more than they can afford.  Furthermore, 67% of the same women believe that selecting a life insurance product is a complicated process.

Life Insurance Costs Too Much

In most cases, life insurance is very affordable… dirt cheap even!  First, women pay less than men for life insurance, since their life expectancy is longer on average.  If you are in good health, let’s just say you can probably afford life insurance at some amount.  For example, I’ve provided quotes below for $500,000 of coverage.  Of course, your coverage could cost even less if you purchase a lower face value.

Quotes for Female, Excellent Health, $500,000 Coverage, Non Tobacco User

Age                                    10 Year Term             20 Year Term             30 Year Term

Female Age 30                          $13                                $18                             $27 – Per Month

Female Age 40                          $16                                $26                             $42 – Per Month

Female Age 50                          $35                                $59                             $97 – Per Month

Female Age 60                          $78                                $148                           $213 – Per Month*

*Note that these quotes are available as of 12/15/2011 and are subject to change.  Rates quoted would apply to female, non smoker, who can qualify for best class health classification.

The Life Insurance Process

For those of you who believe selecting a life insurance product is complicated, please allow me to outline the steps to selecting, applying for, and purchasing a life insurance policy.

  1. Speak to a knowledgeable independent agent about your health history.  If you take any medications or have a history of medical conditions, a good agent will know which companies will rate you at the best health classification, which will save you money.  Your agent should also be able to quickly and clearly explain the types of life insurance and how much is appropriate for your needs.  This should take about 10-15 minutes over the phone.  Call an agency like Select Quote, Accuquote, or our agency, Huntley Wealth.
  2. The application process is straight forward.  At our agency, we take information (address, drivers license, legal name, beneficiaries, etc.) over the phone and send the application to our clients to sign.
  3. After completing and signing the application, most insurance policies require a medical exam.  The cost of the exam is paid by the insurance company.  The exam typically includes blood and urine specimens.
  4. After the medical exam, you’ll be approved typically in 2 to 6 weeks.  The time it takes to approve you primarily depends on whether or not medical records will be ordered from your attending physician’s office.
  5. Once approved, your agent will forward your policy to you.  You send payment, and sign a form showing you received the policy.  Once all requirements are received by the insurance company, your policy will be in force, or effective.

The Met Life study reported women who do have life insurance typically are unaware of the type of coverage (i.e. term, universal life, or whole life) that they possess, and undervalue the amount needed to properly insure their lives to meet their families’ financial needs.  Please don’t fall into this category.  If you have a policy and aren’t sure what benefits it has, or if you need life insurance, please call us to review your needs at 877-996-9383.

10 Year Term for Over Age 60

If you are between 60 – 69 years of age and need to get some inexpensive life insurance, then I have the a solution that might be ideal for your circumstances.

The answer would be a 10 year term life insurance policy that should meet most of your needs and cover the reasons why you want to get some life insurance.

As you well know by now, life insurance does get more expensive the older you become, but even in your sixties you can still find term life policies that you can afford.

Just to give you an idea of how affordable a 10 year term policy can be, I’ve provided a few samples to give you an idea of how much your monthly premium would cost for someone in their 60’s.  These rates are for someone does not smoke and is in reasonably good health.

$100,000 Term Life Insurance Quotes for Ages 60 – 69
Age 10 Year Term (Monthly)
60 Year Old Man $29.00
65 Year Old Man $53.41
69 Year Old Man $82.25

(Disclaimer – These rates are effective as of January 15, 2013)

You can see from the rate differential between someone who has just turned 60 compared to someone who has just turned 69 that there is a fairly significant variance between what you would pay for a monthly premium.

So, if you are in your sixties and coming close to another birthday, don’t delay in getting your 10 year term policy because it will cost you more when you have that birthday.

Why a 10 Year Term Life Policy?

Most people in their sixties are getting close to retirement age.  You may not be there yet, and perhaps you plan to work even up to age 70 or even beyond. In any event, you still want to make sure your loved ones have that financial security blanket in case something happens before you retire.

If a serious life threatening illness, or even were you to die unexpectedly, your family will need that extra protection to get through the difficult times.

Another reason why a 10 year term life policy is the best way to go is simply because term life insurance is the cheapest to buy and the easiest to get.  The other main thing to keep in mind is that the monthly premium the company charges you will remain the same during the life of the term so you can budget accordingly.

Finally, you should also know that the death benefit that your beneficiary receives will be tax deferred so the money can be used any way they need to use the death benefits.

Reasons to Buy a 10 Term Life Insurance Policy for Someone in Their 60’s

The reasons why you will want a 10 year term policy will vary from person to person, but most people who are looking to buy term insurance do so for income replacement.  If you need to consider estate taxes, estate planning or setting up a trust you might be better off to look at buying a whole life or universal life insurance policy…….continue page 2……