TOKYO, July 24 (Reuters) - Japan's Meiji Yasuda Life Insurance Co said on Friday it has agreed to buy U.S.-based StanCorp Financial Group Inc for $5 billion, the latest multi-billion deal by acquisitive Japanese insurers.

Meiji Yasuda, Japan's third-largest life insurer by premium revenue, has said previously it was looking for targets in the world's largest life insurance market to act as an engine for future growth.

Japan's domestic insurance market, while profitable and stable, is facing weak growth prospects due to a rapidly ageing population, prompting its usually domestically focused companies to start looking overseas.

Meiji Yasuda said it will pay $115 per share for StanCorp, representing a 50 percent premium to the U.S. company's closing price on Thursday. The acquisition would be funded with cash on hand, it said in a statement.

Portland, Oregon-based StanCorp, which offers insurance and retirement products to companies and individuals, has about $2 billion in premium revenues and posted a 2014 net profit of $210 million, Meiji Yasuda said.

Japanese insurers have been aggressively pursuing overseas acquisition opportunities.

In June, Tokio Marine Holdings Inc agreed to buy U.S. specialty insurer HCC Insurance Holdings Inc for $7.5 billion, in what would be the biggest M&A deal this year by a Japanese company.

In February, Dai-ichi Life Insurance Co completed a $5.6 billion acquisition of Protective Life, a mid-sized U.S. life insurance firm.

Nippon Life Insurance Co has said it may spend up to 1.5 trillion yen ($12.1 billion) on acquisitions and investments at home and abroad over the next 10 years as it seeks new profit sources in addition to domestic insurance.

($1 = 123.9500 yen) (Reporting by Taiga Uranaka; Editing by Richard Pullin)