What to Look for in Life Insurance Over 50
If you are or are close to age 50, you may think you don’t need to worry with life insurance. Or maybe you are interested in more coverage but aren’t sure what the best option would be? The need for updating your life insurance as you age is more important than you might think. Particularly because the average life expectancy in the US is now almost 79 years old, pensions are harder to come by in the workplace, and healthcare costs are rising.
It’s true that your life insurance needs and prices change as you age. So, what factors should you consider?
Duration of policy
At or around age 50, the duration of the life insurance you are considering is one of the key factors, along with age, that determine the premium. Healthy individuals up to age 70 can typically get a life insurance policy with a term as long as 20 years. At age 50, you may still qualify for an even longer policy term. However, the longer the term, the pricier your premium could be as you age.
With a term life insurance policy at age 50, there is still the risk that you could outlive your policy. However, premiums are typically lower for this type of policy. Think about your circumstances and budget when considering a term life policy at this stage of your life.
In some cases, a whole life policy that accrues cash value might make more sense. The policy could deliver the benefits to your loved ones or the cash value could serve as additional income for you at a later date. Using the cash value that the policy accrues will cause the life insurance benefit to be reduced, so take that into consideration when purchasing.
Peace of mind-vs-cost
Generally, the older you get, the more life insurance premiums cost. But does the peace of mind you can get from extra coverage outweigh the expenses? If you have loved ones depending on your income, knowing that they are financially secure in the event of your death can be a big weight off your shoulders. In addition, permanent life insurance policies help offer some financial security while you are still alive. The cash value accrued from a whole life insurance policy could help you if your retirement fund is not as much as you needed or if you have unexpected costs arise. Buying this type of policy can provide you a tax advantage, too.
Permanent life insurance policies may often be thought of as a safe way to save. As you age, you have less time to recover from an investment loss. Permanent life insurance may be a good strategy because the cash value in these policies can help diversify your portfolio. Even if something happened to other investments, you would have the cash value from your life insurance policy to fall back on. Remember that falling back on your cash value or using it for any expenses will reduce the policy’s benefit.
Additional coverage needs
If you have loved ones who depend on you financially, life insurance can help give them financial security in the event of your death. Maybe you already have a life insurance policy? Check your life insurance needs and see if an additional life insurance policy should be taken out to help cover final costs and bills.
Life insurance at age 50 is still useful in many cases, but it becomes increasingly important with each year that passes that you understand your specific needs. This will help you make sound policy decisions that can protect you and your family for years to come.
Consult with a professional tax and/or legal advisor before taking any action that may have tax or legal consequences.