Life Insurance for the over 50: Facts You should know
For individuals over 50, life insurance may seem like an unnecessary waste of money.
However, reaching your 50s means that you still have almost half your life ahead of you.
What is life insurance over 50?
Life insurance is a policy that acts as a financial security blanket for you and your loved ones.
If something unexpected happens, from being diagnosed with a serious illness, to being unable to work due to an accident or sickness, to passing away; life insurance will reduce some of the financial burdens by paying either a lump sum or part of your income to a beneficiary.
This is often paid to your partner or children, depending on your level of coverage and your chosen policy.
Getting life insurance acknowledges the realities of getting older and can put in place the right safeguards to financially protect yourself and your loved ones in case of the unexpected.
What Are the Challenges That People Over the Age Of 50 Face When Buying A Life Policy?
Purchasing a life insurance policy is easy.
You can get insured within minutes.
However, this is for those who are young, hale, and hearty. It is comparatively difficult for those beyond 50 to get insured. Here are a few challenges faced by people over the age of 50 when buying a life cover.
Life insurance policies become increasingly expensive as you age. It is challenging to find a good deal on life insurance in your 50s. Hence, take time to shop around and compare before you purchase an over-50 insurance policy.
As you age, your health issues and the chances of you getting infected with chronic illnesses also increase. This makes it difficult to get a life insurance policy as you are considered more at risk than the others by the insurance company.
Insurance is cheaper with lesser premiums when you are in your 20s and 30s. The monthly and yearly installments are quite affordable. However, after 50, the premiums can be high. Also, most people at this age retired from their jobs, and cannot afford this.
Types of Life Insurance over 50 – Life Insurance for the over 50: Facts You should know
There is a range of life insurance products available to people in their 50s. They can be broadly divided into two categories: term life and whole life.
Term Life Insurance
Term life insurance covers you for a set period. For example, if you have a 15-year term life policy and you die within that time, your family will receive a payment from the insurer.
The premiums are set at the start, and they don’t change until the policy term is over. The older you are when you apply for the policy, the more expensive your premiums will be. Policies with longer terms tend to have higher premiums too.
The lender may also impose maximum term limits based on your age. Once the policy has lapsed, you can renew it, but you will be older, so it’ll likely be more expensive.
Many people choose term life policies because they are expecting their financial situation to change in the future. For example, in your 50s, you are probably working with debts to pay and dependents to support.
However, in 20 years, you’ll probably be retired, and debt-free, and your children will likely be financially independent. In this case, when choosing life insurance, you may take out a term life policy to cover you in the interim.
Whole Life Insurance
Whole life insurance covers you until the day you die, no matter how far into the future that may be. Whether you pass away at age 55, 80, or 100, your family will receive a benefit payment.
The premiums you pay stay the same each year. However, it’s good to buy this type of coverage sooner (while you are still in good health) to pay a lower monthly premium. In general, whole life policies tend to be more expensive than term life policies because they cover you for longer.
What is the Average Cost of Term Life Insurance for People Aged 50?
Life insurance premiums are assessed on an individual basis, so it’s hard to predict what your premium might be. Your health, smoking status, and family medical history can all impact the cost.
Life Insurance over 50 with Long Term Care Rider
What Is a Long-Term Care Rider?
A life insurance policy pays out a death benefit in case the insured person dies within the coverage period. The benefit can range from $5,000 to $1,000,000, depending on the individual’s contract with the life insurance company.
When you purchase life insurance policies, your agent or the life insurance company will ask you to choose which riders you want to add on. These riders are policy features that give you access to more benefits. The more riders you add, the higher your premiums will be.
An LTC rider allows the insured individual to claim a portion of their policy’s death benefit to cover their long-term care costs. This makes paying for traditional long-term care services easier, but it will also reduce the death benefit that your beneficiaries can receive.
This life insurance policy feature covers:
- Long-term care facility confinement
- Home healthcare service
- Home care service
- Adult daycare
- Hospice care
- Respite care
An LTC rider also enables you to withdraw money from your policy’s cash value. The cash value is another component of insurance that’s separate from the death benefit, so withdrawing cash value will not reduce the amount of money your beneficiaries will receive after you die.
Generally, it’s easier to find long-term care coverage bundled with permanent life insurance (e.g. whole, universal, variable life insurance policies). A term life insurance policy with a long-term care benefit is less common.
A life insurance policy with a long-term care rider can help you if you get into an accident or develop a chronic illness that prevents you from performing basic tasks. Compared to buying separate life insurance, getting this “combo policy” will help you save on premiums.
Life Insurance over 50 No Medical Insurance
Having the right life insurance is pivotal in planning for the future of you and your loved ones. Life insurance can help you fulfill promises you’ve made to your family when you are gone.
Don’t leave the future of you and your loved ones to chance.
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