Do I Need Life Insurance if I’m Over 50?
Traditionally life insurance is something that we get when we have a young family and a high mortgage, in order to provide for our family should we die. But what if we are older and want to invest in some life insurance?
Insurers will often provide policies specifically aimed at people over 50 which have both their benefits and their problems.
What are the good and bad points of a policy for someone who is over 50?
If you are over 50 and looking to get some life insurance you may be attracted by the positives that some insurers provide in their over 50s policies.
- No health questions.
- No medical
- Guaranteed acceptance
It is important to note that there is a cost for these benefits in that premiums are usually quite high. This is understandable given that being over 50 you are getting more likely to die and the insurers are taking a high risk by accepting you for a policy with no questions asked. The only problem is that if you are a completely healthy individual you may be paying a high amount to compensate for those that are not in good health.
Why would you want life insurance if you are over 50?
The wish to acquire life insurance when you are over 50 years old usually comes from a wish to protect others. With the problems that the recent world financial crisis has caused many parents are keen to protect their adult children from any further financial burden which may occur should they die.
There is also the question of the cost of care. As the world population continues to live longer, so care costs in advanced age rise; these costs can be crippling and there may be no money left on death, hence the need for life insurance.
What are the alternatives?
Given the nature of the costs incurred as people age many people consider the option of long term care insurance which can be expensive to acquire but helps to mitigate against some of the exorbitant care costs which can be encountered.
Recently another option has come onto the market, a hybrid of the life insurance and long term care insurance policies. This is usually a permanent rather than a term life insurance policy and is paid by the individual through premiums or sometimes a lump sum of amounts such as $50,000 and $75,000. The amount paid out on death is usually approximately double the amount paid in and some insurers will guarantee the minimum amount payable.
In the meantime if there is a need for long term care the policy will pay out approximately six times the amount paid in. The amount paid out for care is usually deducted from the amount paid out at the time of death; this is why having a guaranteed pay out on death can be useful. It should be noted that the costs of these hybrid policies can be high and there may be a waiting period before any money is paid out for care, but it is still worth considering if you are over 50 and looking for life insurance.