Shopping for life insurance is easy and stress-free for young, healthy people. Young people must determine how much coverage they want and get a free online quote. Some term life insurers let approved applicants start policies without a medical exam.
After 50, life insurance options may be more limited. You may need less coverage to afford a monthly premium, and your life insurance application may be scrutinized more closely. Life insurance is available in your 50s and 60s. Adjust your expectations and look around to acquire the most coverage at an affordable price.
Insurance Buyers Over the Age of 50 Face Special Difficulties
As you browse for life insurance, you may discover a few negative factors. These circumstances aren’t your fault but affect your ability to get life insurance or afford premiums.
- Your age: Life insurance is cheap when you’re young and healthy, but it increases with age. After 50, you may pay more for adequate coverage. It’s crucial to compare life insurance quotes.
- Your Health: The senior you are, the more likely you are to have a chronic health condition that can make purchasing life insurance difficult. When you apply for life insurance, you’ll be asked health questions, and your responses could raise red flags or prevent you from buying a policy.
- Policy Length: Age also affects the length of coverage you can buy. If you’re 55, a 30-year term policy will be pricey, but a 10-year policy will be cheaper. Permanent coverage like whole or universal life might be expensive for older people.
Do People Over 50 Need Life Insurance?
Do 50-year-olds require life insurance? Life insurance is designed for persons who need income replacements during their working years and for those with dependents. By 50, you should be winding down your working years, and your kids may be grown.
Why get life insurance now? Over-50s can easily need life insurance. Even if your children are grown and no longer rely on your income, there are many additional reasons to preserve this financial protection. Reasons include:
- Burial insurance: No matter how old you are, you’ll eventually need burial insurance to pay for your final costs. Including the funeral service, burial plot, headstone, transportation, flowers, and coffin or urn, the average funeral cost can easily exceed $10,000. Final medical and hospice charges could increase the total.
- Estate Taxes: Over-50s may also worry about estate taxes. The estate tax can erode up to 50% of a decedent’s assets. Without a plan, such as life insurance proceeds, survivors may have to sell retirement accounts or family heirlooms to pay the taxes. When assets are sold this way, they’re generally sold below market value.
- Retirement Income Replacement: When a retired person dies, their spouse’s pension may end. A life insurance policy might help your spouse pay bills and enjoy life after you’re gone.
- Business Succession: Life insurance can aid business owners over 50 with business succession. Life insurance proceeds could keep a company functioning while a new owner or partner is found or a buyer is identified.
There are many other reasons people over 50 may desire life insurance. Remember that leaving anything behind is natural at any age. Life insurance can help you do that, which is why people of all ages buy it yearly.
What’s the best life insurance for those over 50?
Online life insurance options can be overwhelming at any age. Know how each sort of life insurance works before shopping.
Term Life Insurance
It is sold for a specific duration of time, or a term, before expiring. Most term policies last 10, 15, 20, or 30 years. Term life insurance is no-frills coverage. You get pure death benefit coverage without cash value or savings. Cheap term life insurance policies expire after a specific period, although they can be helpful in some situations.
Term plans are commonly used to protect a 15- or 30-year mortgage. To continue coverage when a term life insurance policy expires, the policyholder must reapply at their present age and health. This means the new coverage’s premium will be greater, even if the face amount remains the same. Many people don’t mind because term insurance prices are lower than alternatives.
Permanent Life Insurance
Choose full life insurance if you don’t want your policy to expire. Permanent life insurance never expires but costs extra. The policyholder can borrow or withdraw money from a permanent life insurance policy’s cash value component. This can give additional funds for a down payment, car purchase, debt repayment, or eventual retirement income.
Permanent life insurance premiums are normally locked in for life but are more expensive than term rates. This implies the policyholder’s rates won’t rise, even if they get sick or develop a chronic illness. Permanent life insurance for persons over 50 can also be used to complement savings. A whole life insurance policy can assist you in building tax-deferred funds for future use.
The cash value of whole life insurance guarantees growth, unlike the stock market. Because they are tax-deferred, monies can grow tax-free until they are withdrawn. This can give protection and peace of mind by protecting the principal regardless of market or economic conditions. These life insurance plans’ death benefits are tax-free to the beneficiary (or beneficiaries).
This means survivors can spend the money without giving a share to the IRS. Whole life is the most common type of permanent life insurance, but there are others. These specialized insurance are best for individuals with specific financial goals, but they may fit your needs. Whole life insurance expenses more than term life. We’ll compare term vs whole life for 50-year-olds below.
No-medical-exam life insurance
Many with serious health concerns may need no-med life insurance. Those who have been denied life insurance have few options. When someone applies for life insurance, the insurer risks paying a claim. If the insurer thinks the risk is too high, it will raise the price or deny coverage. People over 50 who need life insurance still have options; they need to look. You may think you can’t afford life insurance, but Haven Life offers a no-medical-exam plan.
Final Expense Insurance
Final Expense insurance is another form. It’s offered to 50-85-year-olds with limited salaries to pay for funerals. Final expense plans are $10k-$25k simplified issue whole-life policies that cover funeral fees, final debts, etc. Most buyers have no savings for final expenses. They provide simplified underwriting and speedy approval. Mutual, Foresters, and AIG provide these products.