Table of Contents
Key Takeaways
- Life insurance is often purchased by families with children to provide financial support in case a parent passes away.
- Nonworking spouses and partners can benefit from life insurance coverage to help cover costs and replace their contributions to household and childrearing tasks.
- Family life insurance plans can be created by having each family member apply for their own policy or by adding family members to one person's policy.
- Family life insurance plans offer convenience and potential future options for family members, but may have lower coverage limits and require the main applicant to buy a minimum amount of insurance.
- It's important to set up family life insurance early to ensure eligibility and affordability, and consider options for upgrading or adjusting coverage in the future.
Myths and misconceptions about buying life insurance are all too prevalent. Some of the most common misconceptions surround buying life insurance past age 50. In fact, you may have heard that you don't need it or it's too late to buy — but the truth is far more nuanced.
If you already have life insurance, now many be a good time to a change or update your policy, as your life insurance needs typically evolve as you age. What worked when you were 35 might not be equally beneficial now. If you want to help protect your family from financial hardship, it's important to consider all your options. Here's what you need to know about over 50 life insurance.
Why Get Life Insurance Over 50?
Whether you're considering updating your current policy or are a first-time buyer, being over 50 likely means planning for your family's financial future is taking on added importance.
Life insurance exists to help provide a financial cushion for your loved ones. With your death benefit, your beneficiaries may be able to replace your income, pay for education costs, cover debts or keep up with the mortgage. Without it, they may struggle financially.
If you're looking for a way to provide for your family after you're gone, life insurance can help. However, you must know your needs so that you can pick coverage that will meet them.
Updating Life Insurance for People Over 50
If you already have a policy, it might be a good time to revisit it and make sure it's still a good fit. Changes in your life could make another type of policy more beneficial.
For example, you may have purchased a 20-year term life insurance policy at 35 when your kids were young. Perhaps your goal then was to help cover educational costs if you were to pass while they were young. Now, they may be about to leave college, and your term policy expires in a few years. This would make it the ideal time to consider a new approach to life insurance.
With your children entering adulthood, your focus may shift to a permanent life policy. While this is typically more expensive than a term policy, it lasts the duration of your life as long as premiums are paid and locks in your premium rate. It could provide income replacement and some financial security for your spouse when you pass.
You may be wondering about medical exams if you decide to change your policy or get a new one. Many companies will require those over 50 to submit background health information and possibly undergo an exam. If your health has changed since you began your coverage, that may impact your policy. However, requirements are different across policies, and it's possible for almost anyone to find a policy that works for them.
Buying Life Insurance for the First Time Over 50
If you're nearing 50, it's not too late to think about buying life insurance for the first time. Many policies address the needs of older first-time buyers.
The first thing to consider is the type of coverage you need. If you don't have much debt and want to ensure your family has a financial cushion into your retirement, term coverage might be a fit. Term policies are typically more affordable. If you'd prefer coverage that lasts the rest of your life, a permanent life insurance policy is another option as long as premiums are paid. Consult a financial professional and shop around to find the right policy for your needs.
Once you decide on a policy, buying life insurance can be straightforward. To begin the application process, you'll need to provide personal health information. Then, you may need an in-person health exam. Once approved, your insurer will tell you how much you've been approved for and the premium. Accept it, and you're ready to go.
Health Considerations for People Over 50
When it comes to life insurance for people over 50, your health is a significant factor in determining if you can get approved for certain. It can also affect the affordability of your premium.
Typically, the younger and healthier you are, the more affordable your life insurance premium will be. Having preexisting conditions or being in poor health doesn't necessarily disqualify you from obtaining a policy, but it may impact the amount of coverage and the cost. That's something you'll need to consider as you explore your options.
Some insurers do offer no-exam health insurance. These policies typically don't have high coverage rates, but the death benefit can help your loved ones pay for your burial, final expenses and other debts.
Getting the Coverage You Need
As you arrive at significant milestones in life — marriage, starting a family, a new job — it never hurts to review your life insurance policy. The same holds true as you get older. Set aside a time each year to look at your coverage and your beneficiaries to determine if any changes seem needed. Staying up to date on your policy can ensure that you have the proper coverage for your needs, and your death benefit will go to the person you want it to when that time comes.
Speak with a financial professional about your options. They can help you determine the best path for your needs.
