Best Life Insurance for 56 Year Olds: For Life Insurance, Change Is Integral

Think back to what your life was like ten years ago. Chances are, you were a completely different person a decade ago than you are now, and that you faced different struggles and celebrated different life milestones. Now, think about the past year and how you have changed. 

If there is one thing that is constant, it’s change. So why should your life insurance policy stay the same?

One of the most common misconceptions of life insurance is that, once you purchase your policy, you are good to go! Many policyholders fail to realize that their life insurance policy should be reviewed every few years to ensure that it is meeting his or her needs. 

If you’ve recently purchased a policy, then good for you! Life insurance coverage is an important part of a strong financial plan. However, you aren’t set for life just yet. 

Below, we’ll discuss why you should frequently review your life insurance policies and what to look for every few years to make sure that your family and your wallet are protected!

Is Your Life Insurance Policy Low Maintenance?

If you have purchased a whole life insurance policy, the answer to that question is no. A whole life insurance policy will require annual maintenance checks.

Whole – or permanent – life insurance is life insurance designed to last for  your entire life, regardless of any changes in your health. This is why it often goes unchecked; many policyholders believe that, because they are paying their premiums, their coverage is up-to-date.

The built-in cash growth potential attached to a whole life insurance policy means that it is an investment. Like any investment, you want to make sure it is performing well. Unfortunately, you are not in control of how your policy is performing, as its performance is dictated by the market. You may also want to pay attention to the interest your policy is accruing: since the premiums on these types of policies are tied to interest rates, it will need to be routinely reviewed and evaluated. If interest rates are low, your policy may be subject to dividend reduction. 

Because the details surrounding whole life insurance policies are so complex and require maintenance, we do not frequently recommend these types of policies for our clients. 

Term life insurance is much more low maintenance; however, reviewing your policy periodically with an agent is always a good idea. Let’s talk about why:

Rating and Benefit Changes

One of the most important reasons to check in with your term life insurance policy is to see if you qualify for a rating change. 

This is especially important if you applied for life insurance as a high risk client or as a smoker. 

If you bought term life insurance as a smoker and have quit since it’s purchase, you may be eligible for a re-rating. This will be based on the current state of your health as, well as your doctor’s prognosis. In cases like these, your agent will look at your medical records and draft a cover letter to your carrier’s underwriter, communicating the positive changes in your health and lifestyle choices. 

If this seems like a lot of work, let us just take a second to tell you that it is worth it. Re-evaluating your insurance risk can save you hundreds of dollars per year. Let’s look at some non-smoker premiums for individuals with Preferred and Standard ratings:

Life Insurance rates for a 56 year old Male Preferred Non-Smoker (with exam):

Face Amount 10 year 15 year 20 year

$250k $50 $70 $86

$500k $91 $130 $164

$750k $137 $193 $244

$1 million $165 $251 $315

Life Insurance rates for a 56 year old Male Standard Non-Smoker (with exam):

Face Amount 10 year 15 year 20 year

$250k $80 $105 $138

$500k $149 $202 $269

$750k $220 $300 $401

$1 million $277 $372 $521

Life Insurance rates for a 56 year old Female Preferred Non-Smoker (with exam)

Face Amount 10 year 15 year 20 year

$250k $37 $47 $61

$500k $68 $87 $115

$750k $98 $127 $172

$1 million $123 $166 $221

Life Insurance rates for a 56 year old Female Standard Non-Smoker (with exam)

Face Amount 10 year 15 year 20 year

$250k $57 $73 $96

$500k $102 $138 $183

$750k $156 $203 $274

$1 million $167 $255 $348

As a smoker – even one rated standard or preferred – you could be paying two-to-four times these premium prices! That is hundreds of extra dollars per year!

This is why it is important to review your current policy and rating, and to compare it to an estimate of your current risk. And your risk is not the only thing that will change frequently. 

The amount of coverage you may need will also need to be reviewed and adjusted. 

You, like most Americans, probably purchased a policy after starting a family. This means that your policy was probably big enough to cover the costs of your mortgage and caring for your children. As you age into your fifties, the expenses you once had will not be the same, and you will need to adjust your death benefit accordingly.  

Your life insurance should be tailored to your needs and your current situation, which is why you should always check in and make sure it is up-to-date, even when these changes aren’t positive.

Real Life Scenario: What If The Cost of My Insurance Increases?

So far, we have only talked about reporting positive chances in your health and any changes to your financial needs, in order to make sure you aren’t overpaying for life insurance. 

But what happens if your needs change and your life insurance increases?

This is a common question we encounter with our clients, particularly as they review or renew their term life insurance policies every decade. 

The first thing we want to say is that this is partially why we encourage frequent review and updates: if you re-purchase a term life insurance policy while you are healthy, it can help provide you with protection when you may not be in the best of health. 

And if you aren’t healthy when it comes time to review your policy, you still have options. 

Even if your premiums increase, it is important to report any changes in your health to your agent and your carrier. This is to ensure that the policy size you have reflects your current situation. 

Maybe you reviewed your policy ten years ago, before you reached your fifties and you lowered your death benefit. If you have gotten sick in this time or there have been drastic changes to your health, you might have taken on medical debts – debts that would fall to your family and loved ones once you pas away. You’ll want to adjust your policy size to provide coverage in instances like these. 

If your health condition has gotten so serious that you fear you will face declines for life insurance, you should speak to an agent as soon as you are able. 

For cases like these, term life insurance might not be right for you. Instead, you may want to consider alternatives, such as Long Term Care riders or Chronic Illness Coverage.

Long Term Care riders  are designed to help pay some of the expenses you may incur when  you are no longer able to perform daily activities or care for yourself. This type of coverage is renewable for life, and covers stroke injuries, accidents and high-risk diseases such as Alzheimer’s and other long-term cognitive conditions. These riders can also be used to cover nursing home or in-home care expenses.

Chronic illness riders, similarly, protect you in the event that you can no longer care for yourself. Under this type of coverage, conditions such as arthritis, cancer, stroke, dementia, accidents, injuries or cognitive impairment are covered.

Talk To An Agent Today

Ultimately, it is the responsibility of you, the policyholder, to provide your agent and carrier with updates regarding your health. 

Even if your health takes a turn for the worse, we encourage you to talk to an agent, who can answer your questions and help you find the right policy for your needs. 

Remember: purchasing a policy itself is a responsibility you have toward your loved ones. Ultimately, your coverage is designed to provide a safety net for your family and loved ones after you’re gone. Let us help you find the best coverage.