Quora Answer: Can Someone in His 50s Get Cheap Life Insurance?

The following is my answer to a Quora question: “Can someone in their 50s get cheap life insurance?”

I can only answer within the context of Singapore, and that is mainly because of the restrictions of my professional licensing.  Cheap is relative.  The fact of the matter is that if you have not managed to get coverage before, getting coverage now will not be cheap.  However, we are weighing this against the cost of loss.  In such a case, coverage is cheap, since the amount covered is larger than the projected cost of all premiums paid.

In general, total and permanent disability coverage drops off at age 65, and critical or terminal illness at age 75.  Life coverage is until age 100, for most plans.  When the premium is calculated, it is based on the life expectancy less the age of policy inception.  That cost of coverage is divided by this.  The life expectancy for a male in Singapore is generally taken to be in the region of 84 years, based on average age of mortality in Singapore.  Therefore, assuming policy inception is from age 50, you are paying that distribution cost for 15 years for disability benefit, 25 years for critical illness benefit, and 34 years for death benefit.  This is why it looks expensive.

On an average, you are looking at paying between 60 to 70% of the coverage in the premiums.  This is based on a whole life policy, which has a surrender value.  If you are looking at a term plan, which does not have a surrender value, this drops substantially to around 40%.  The disadvantage is that term life plans have varying periods for the term, from 5 years to 25 or 30 years, depending on the insurer.  So, if you outlive your whole life coverage, getting it at that age will be very expensive, and the cost would likely be more if you acquired a whole life in the first place.

In any case, you need to sit down with a financial advisor for a detailed explanation.  I have only spoken in general, since there is no financial health review, or any form of KYC here.