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Life Insurance for Seniors Over 50 in Canada

Securing Life Insurance for Seniors Over 50: A Complete Guide for Canadians
Securing Life Insurance for Seniors Over 50: A Complete Guide for Canadians

Canadians today are living longer than ever before. But increased longevity also brings the need to adequately protect assets and provide for loved ones later in life. Purchasing life insurance for seniors over 50 can offer crucial financial safeguards precisely when you need them most.

This definitive guide examines everything Canadian seniors need to know about getting covered in their 50s, 60s, and beyond.

Types of Life Insurance for Seniors Over 50

There are several main types of life insurance policies available to Canadians over 50:

Term Life Insurance for Seniors Over 50

  • Provides temporary coverage for a set period like 10, 15, 20, 25, or 30 years
  • The policy only pays out a death benefit if the insured passes away during the term period.
  • Premiums are typically lower compared to permanent life insurance.
  • After the term expires, coverage ends unless the policy is renewed or converted.
  • Ideal for income replacement needs that are short or medium term

Read more: Term life insurance in Canada

Whole Life Insurance for Seniors Over 50

  • Provides permanent, lifelong coverage as long as premiums are paid
  • Level premiums are guaranteed to never increase and remain the same until death.
  • Policy builds up a cash value that grows at a fixed interest rate set by the insurer
  • Cash value can be borrowed against or withdrawn during the life of the insured.
  • Provides lifelong protection and disciplined savings component

Universal Life Insurance for Seniors Over 50

  • Also offers permanent, lifelong coverage for the entirety of your life.
  • Allows for flexible premium payments – can pay more or less based on needs
  • Cash value earns interest at a variable rate tied to market performance.
  • More adjustable coverage than whole life insurance
  • Premiums, death benefits, and cash value growth can be customized.

Final Expense Insurance for Seniors Over 50

  • Specifically, it covers end-of-life costs like burial, cremation, and funeral services.
  • Face amounts are limited to $25,000 or less to cover final expenses.
  • Guaranteed acceptance with limited underwriting requirements
  • Simplified application process for quicker coverage

Guaranteed Issue Life Insurance for Seniors Over 50

  • Does not require a medical exam to qualify for coverage
  • Typically provides maximum coverage amounts of $25,000 or $50,000
  • Has higher monthly premium rates compared to fully underwritten policies
  • Quickly provides limited coverage if health prevents qualifying for larger policies.

Why Life Insurance for Seniors Over 50 Is Essential

Why Life Insurance for Seniors Over 50 Is Essential
Why Life Insurance for Seniors Over 50 Is Essential

There are several compelling reasons Canadians should strongly consider life insurance for seniors over 50:

Replace Lost Income for Dependents

If the primary breadwinner or income earner passes away, life insurance proceeds can help the surviving spouse maintain their standard of living. This income replacement is especially important if dependents are still relying financially on the deceased.

Pay Off Outstanding Debts and Liabilities

A life insurance death benefit can pay off remaining mortgages, lines of credit, credit cards, auto loans, and any other debts that would otherwise be passed onto surviving relatives. This can provide loved ones with a clean financial slate after you’re gone.

Read more: Guaranteed Death Benefit Life Insurance

Fund Grandchildren’s Education

Proceeds from a life insurance policy can be used to fully pay for grandchildren’s future post-secondary education costs, including tuition, housing, books, transportation, and other expenses. This removes the financial burden from grieving children.

Support a Charitable Cause

The payout from a senior’s life insurance policy can be left to a charitable organization, foundation, or non-profit the policyholder cares deeply about. This creates a legacy gift to give back to society long after you’re gone.

Pay Estate Taxes and Final Expenses

Avoid having estate taxes and end-of-life costs diminish the value of your estate that gets passed down to heirs. The average cost of just a funeral in Canada is between $5,000 and $10,000 according to Sun Life (Source)

Avoid Burdening Family with Expenses

Ensure no loved one is stuck having to cover expensive final costs like medical bills, funeral services, probate fees, debts, and taxes after you pass away. This financial stress can add to the grief of losing someone.

Read more: family life insurance in Canada

Leave an Inheritance or Legacy

One of the most common reasons over 50s get life insurance is to create a legacy by passing down assets in a tax-efficient way to their children, grandchildren, or other loved ones as an inheritance.

Cost of Life Insurance for Seniors Over 50

Cost of Life Insurance for Seniors Over 50
life buzz quote in canada new 8 1
Cost of Life Insurance for Seniors Over 50

The monthly or annual cost of life insurance for those over 50 depends primarily on these key factors:

Age of Policyholder

Premiums rise steadily as seniors get older, mainly due to increased health risks and shorter life expectancy. A healthy 55 year old will pay significantly less than a 75 year old for the same coverage amount.

Age10-Year Term, $500k CoverageWhole Life, $500k Coverage
50$124/month$600/month
60$187/month$750/month
70$340/month$900/month

Read more: Life Insurance for Seniors Over 70 in Canada

Gender of Policyholder

Women generally live longer than men. Canadian women have a life expectancy of 84 years compared to 80 years for men. This allows insurers to offer women lower premium rates for comparable policies.

Gender10-Year Term, $500k CoverageWhole Life, $500k Coverage
Male, 55 years old$124/month$600/month
Female, 55 years old$108/month$550/month

Health Rating and Medical History

Seniors who maintain excellent physical health and do not use tobacco will qualify for the lowest premium rates. Any heart disease, cancer, stroke, or major conditions will result in higher “substandard” premiums.

Health Rating10-Year Term, $500k CoverageWhole Life, $500k Coverage
Preferred Plus$95/month$550/month
Preferred$110/month$600/month
Standard$130/month$700/month
Substandard$220/month$850+/month

Coverage Amount (Death Benefit)

Naturally, higher death benefit amounts require insurers to charge higher premiums to cover the larger potential payout. Optimal coverage should align with specific income replacement and legacy goals.

Coverage Amount10-Year TermWhole Life
$250,000$75/month$400/month
$500,000$124/month$600/month
$1,000,000$235/month$950/month

Type of Policy

Term life insurance will generally be the most affordable option for cost-conscious Canadian seniors needing temporary coverage. Permanent life with cash values will have notably higher monthly rates.

Policy TypeAverage Monthly Premium
10-Year Term, $500k Coverage$100 – $150/month
20-Year Term, $500k Coverage$125 – $200/month
Whole Life, $500k Coverage$550 – $950/month

Strategies to Reduce Costs of Life Insurance for Seniors Over 50

The good news is there are many ways Canadians can get affordable life insurance for seniors over 50:

  • Compare quotes from at least 5-10 different insurance providers to find the most competitive rates for your situation. Independent brokers are extremely helpful for this.
  • Take full advantage of any discounts that some insurers offer for older policyholders. Multi-policy discounts are also common.
  • Maintain robust physical health through diet, exercise, regular checkups, and avoidance of tobacco. This can substantially improve health ratings.
  • Consider shortening the term to 10 or 15 years instead of 20-30. Shorter terms have lower premiums while still providing temporary coverage.
  • Bundle new life insurance policies with an existing spouse’s policy. Many insurers offer discounts for joint coverage.
  • Adjust coverage amounts to balance sufficient protection with reasonable premiums. Avoid over-insuring.
  • If approved, pay premiums annually rather than monthly to receive the lowest negotiated rates.

How To Buy Life Insurance for Seniors Over 50 In Canada

These are the key steps Canadian seniors should follow when purchasing the right policy:

Step 1: Calculate the Appropriate Coverage Amount Needed

Thoroughly assess debts, income replacement needs, funeral costs, estate taxes, inheritance goals, and other factors. Online calculator tools from providers like Life Buzz are extremely helpful. Consulting a financial advisor also adds value.

Step 2: Compare Quotes From Insurance Providers

Get personalized quotes from at least five insurers and brokers. Compare premium costs, underwriting requirements, ratings for financial strength, customer satisfaction, range of policy lengths, available riders, discounts offered, and other benefits.

Step 3: Submit Your Application

Submit your full application with the chosen provider. Disclose any medical history, pre-existing conditions, medications, tobacco use, family history, or other lifestyle factors that can influence risk ratings. Honesty is crucial.

Step 4: Undergo the Potential Medical Exam

If applying for traditional fully underwritten coverage, you will likely need to complete a medical exam by the insurer’s doctor. This may involve blood work, urinalysis, and basic health measurements. Simplified issue policies with fewer health questions may not need an exam. But they offer lower coverage limits like $25,000 to $50,000.

Step 5: Select the Optimal Policy and Payment Details

Carefully review the insurer’s proposal and select the policy with coverage amounts, premiums, term lengths, discounts, riders, and other details that best align with your budget and needs. Pick your preferred premium payment schedule – monthly, quarterly, or annual.

Step 6: Pay All Premiums Promptly

Set payment reminders and pay premiums on time to prevent accidental lapse in coverage. Most insurers offer autopay and electronic funds transfer options to simplify this. Review statements regularly and contact your insurer with any billing questions.

Where To Buy  Life Insurance for Seniors Over 50 In Canada

Canadian seniors can purchase life insurance for seniors over 50 through various channels:

Insurance Agents

Agents represent a single life insurance company, like Manulife, Sunlife, or Canada Life. They offer policies from that sole provider. Limited product selection but strong expertise in their offerings.

Independent Insurance Brokers

Brokers have access to policies from many insurance carriers. This offers seniors the widest selection of products to find the optimal fit. Brokers provide unbiased recommendations not tied to any one company.

Directly From Insurance Carriers

Purchasing coverage directly from life insurance providers in Canada like RBC Insurance, Equitable Life Insurance of Canada, Canada Protection Plan CPP Life Insurance and Desjardins Insurance allows Canadians to deal with the insurer without any intermediary. The convenience is appealing but guidance is more limited.

Online Marketplaces

Websites like PolicyAdvisor, Rates.ca and Kanetix allow fast and easy quotes from top insurers. Comparing policies and prices is highly efficient. Limited personal support is a drawback.

Independent brokers are usually the best bet for securing affordable rates and optimal policies. Their expertise with the over 50 life insurance market brings substantial added value.

Pros and Cons of Life Insurance for Seniors Over 50

Pros of Life Insurance for Seniors Over 50

  • Income replacement for dependents if the primary earner passes away
  • Can pay off remaining debts like a mortgage so they are not passed on to family
  • Allows seniors to leave an inheritance or legacy for their heirs in a tax-efficient manner
  • Provides guaranteed coverage that cannot be taken away regardless of future health changes later in life
  • Avoids burdening children or families with expensive end-of-life expenses like medical bills and funeral costs
  • Life insurance proceeds are not subject to probate taxes, which helps preserve more of the death benefit.

Cons of Life Insurance for Seniors Over 50

  • Premiums can be prohibitively expensive for seniors on fixed or low incomes.
  • Those with pre-existing medical conditions often have difficulty getting approved.
  • Term life insurance for Seniors Over 50 eventually expires, and protection is lost later on in advanced age when the need is highest.
  • Permanent life insurance for Seniors Over 50 is substantially more costly than term insurance.
  • Simplified underwriting options like guaranteed issue have strict coverage limits like $25k or $50k maximum.

Overall, the benefits often outweigh the downsides for most Canadians over 50 when factoring in the invaluable peace of mind life insurance provides.

Ensuring A Smooth Claims Payout Process of Life Insurance for Seniors Over 50

Take these proactive steps when first purchasing coverage and throughout policy ownership:

Clearly Designate Primary and Contingent Beneficiaries

Name specific individuals like a spouse, children, or grandchildren as the primary beneficiaries entitled to the payout upon your death. Also, appoint contingent beneficiaries as backups if the primary beneficiary passes before you.

Select an Executor or Trustee

Choose a responsible individual like an accountant, lawyer, or family member to act as executor. They will manage the distribution of policy proceeds to any heirs according to your wishes.

Update Beneficiaries After Major Life Events

Review your beneficiary designations after events like marriage, divorce, remarriage, having children, grandchildren going to college, retirement, moving homes, or death of a previously named beneficiary. File beneficiary change forms to keep them current.

Inform Heirs About Your Coverage

Let your primary beneficiary and executor know details about your policy like the provider name, death benefit amount, and contact info. This prevents delays in accessing funds and ensures the payout process goes smoothly.

Comparing Providers and Products of Life Insurance for Seniors Over 50

Comparing Providers and Products of Life Insurance for Seniors Over 50
Comparing Providers and Products of Life Insurance for Seniors Over 50

When choosing a life insurance policy after age 50, reviewing a few top options can help find the right fit. Here are some leading companies and sample policy pricing:

Sun Life

  • SunTerm: 10-year term policy. $500,000 coverage for a 55-year-old is $52/month.
  • Sun Par Protector: Whole life with guaranteed cash values. $500,000 coverage for 55-year-old is $150/month.

Canada Life

  • Term Life Insurance: 10-year term policy. $500,000 coverage for 55-year-old is $63/month.
  • Whole Life Insurance: Lifelong coverage with cash value savings. $500,000 coverage for a 55-year-old is $175/month.

Manulife

  • Term Life Insurance: 10 or 20-year terms available. $500,000 coverage for a 55-year-old is $72/month for ten years.
  • VitalityLife Plan: Unique whole life product that rewards healthy habits with premium reductions. $500,000 coverage for 55-year-old is $180/month.

RBC Life

  • RBC Term Life Insurance: 10, 15, 20, or 30-year coverage terms. $500,000 coverage for a 55-year-old is $68/month for ten years.
  • RBC Permanent Life Insurance: Lifelong coverage with cash value options. $500,000 coverage for a 55-year-old is $160/month.

Empire Life

  • Term Life Insurance: 10-year term policy. $500,000 coverage for 55-year-old is $58/month.
  • Lifetime Protection: Permanent life with guaranteed cash value growth. $500,000 coverage for 55-year-old is $165/month.

As shown, premiums can vary significantly between top providers for similar products. Shopping around is wise. An independent broker can assess all the options.

Read full review: Empire Life Insurance Review in Canada

Why Get Life Insurance for Seniors Over 50 Now Rather Than Postponing

The time for Canadian to secure life insurance for seniors over 50 is now, while still relatively healthy and insurable. Postponing purchasing coverage always carries risks:

  • Health can deteriorate, leading to rejected applications or high substandard premium rates later on. Over 30% of Canadians in their 60s have two ore more chronic condition like heart disease, stroke, cancer, diabetes, or hypertension according to Government of Canada. (Source)
  • Term life insurance becomes much more expensive after 50, so seniors lose out on lower locked-in rates by waiting year after year.
  • Unexpected accidents or illnesses can suddenly make you uninsurable. Coverage then becomes impossible to access.

By getting insured now, over 50 Canadians can enjoy iron-clad peace of mind knowing their assets are protected and loved ones will be provided for. Speak with a top independent broker and take control of this crucial part of retirement planning without further delay. The time for action is now.

Frequently Asked Questions (FAQs) about Life Insurance for Seniors Over 50

Q: What is the average cost of life insurance for seniors over 50?

A: The average cost of life insurance for seniors over 50 depends on several factors but is typically $80-$300 per month for a $500,000 policy for a healthy senior. Costs increase with age and health issues.

Q: How do I find the best life insurance company for seniors over 50?

A: To find the best life insurance company for seniors over 50, compare quotes from top insurers like Sun Life, Canada Life, and Empire Life. Look for good financial strength, customer satisfaction, and rates for your situation.

Q: What are the chances I will be denied life insurance for seniors over 50?

A: Denial chances for life insurance for seniors over 50 vary based on your health. For seniors in good health, odds of denial are low but serious medical conditions increase the risk of being denied.

Q: How do I find cheap life insurance for seniors over 50?

A: To find cheap life insurance for seniors over 50, maintain good health, compare rates from many insurers, choose shorter terms, bundle policies, look for senior discounts, and pay premiums annually.

Q: Can life insurance for seniors over 50 be used to pay for long-term care?

A: Yes, life insurance for seniors over 50 can pay for long-term care if you purchase a policy with a long-term care rider or use permanent policy cash values.

Q: Is life insurance for seniors over 50 portable?

A: Yes, individual life insurance policies for seniors over 50 are portable and stay with you even if you change jobs or retire. You just keep paying the premiums.

Q: Where can I compare prices for life insurance for seniors over 50?

A: You can easily compare life insurance prices for seniors over 50 online through insurance marketplace websites like PolicyAdvisor, RateHub, and LowestRates.ca.

Q: How do I know if I qualify for life insurance for seniors over 50?

A: You can get an initial quote online providing just basic details to see if companies will provide life insurance for seniors over 50 coverage and at what estimated cost.

Q: What is the life expectancy of seniors over 50 in Canada?

A: The average 50-year old woman will live to age 85, while the average 50-year old man will live to age 81, according to Statistics Canada mortality data.

Q: How much life insurance do I need if I'm a senior over 50 in Canada?

A: Factors include income replacement for dependents, covering debts, final expenses, estate taxes, and inheritance goals. A life insurance calculator can help determine the right amount.

Q: What are the chances my life insurance application will be declined if I'm over 50?

A: Approval rates depend greatly on health. For seniors in good shape, chances are low, but serious conditions increase denial risk. Having a clean exam improves the odds.

Q: How can I get the cheapest life insurance for seniors over 50?

A: Bundle policies with a spouse, maintain excellent health, compare quotes thoroughly, choose shorter terms, pay annually, and leverage any senior discounts available from insurers.

Q: What is the maximum life insurance coverage amount I can get over 50?

A: Most insurers will allow up to $1 million in coverage, and some go higher. Exact maximums depend on income, net worth, health, and the amount of justification for a higher death benefit.

Q: How long does it take to get life insurance for seniors over 50?

A: The entire process usually takes 4-8 weeks from initial quote to policy issuance. It can be quicker if applying for simplified issue with limited underwriting.

Article Sources:

For a deeper look at our dedication to accuracy, transparency, and independence, please refer to the Lifebuzz.ca Editorial Policy. We take great pride in being Canada’s most trusted life insurance news source:

  1. Compare life insurance for over 50 in Canada – https://www.finder.com/
  2. How much does life insurance cost for a 50 year old? – https://www.policyadvisor.com/
  3. How Much Does Over 50s Life Insurance Cost (Ages 50-59)? – https://www.dundaslife.com/
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Written by Ben Nguyen

Ben Nguyen is an award-winning insurance expert and industry veteran with over 20 years of experience. He is the chairman and director of IDC Insurance Direct Canada Inc., one of Canada's leading online insurance brokerages.

Ben is renowned for his extensive knowledge of life, health, disability, and travel insurance products. He is the prolific author of over 1,000 educational articles published on LifeBuzz, BestInsuranceOnline, and InsuranceDirectCanada. His articles provide Canadians with advice on making smart insurance decisions.

With a Bachelor's degree in Actuarial Science and a Fellow of the Canadian Institute of Actuaries (FCIA) designation, Ben is frequently interviewed by media as an insurance industry spokesperson.

He has received numerous honors including the Insurance Council of Canada’s Pivotal Leadership Award, the Canadian Insurance Hall of Fame induction, and the President’s Medal from the Canadian Institute of Actuaries.

Ben continues to shape the vision and strategy of IDC Insurance Direct as chairman. He is dedicated to advancing the insurance industry through his insightful leadership.

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