Life insurance is important for those of any age. For years, the debate has gone on regarding whether or not people who are over age 50 should still carry this type of insurance protection.
Many people believe that when a person gets older and no longer has small children who are counting on their income for support, that they also no longer have a need for life insurance protection and that they should cancel their existing life insurance coverage.
The truth is, however, that regardless of what age you are, whether it be over 50, 60 or 70 and are looking for life insurance, you need to be prepared for the many different risks that could come up, causing your loved ones financial harm. One of the best ways to do so is to have life insurance coverage. In some cases, this could be one of the worst mistakes that you make for your family.
In years past, those who were over age 50 were likely to have their mortgage paid off, their children out of the “nest,” and were able to rely on a regular amount of Social Security and investment or pension income throughout the remainder of their lives.
Unfortunately, today that is no longer the case. Oftentimes, those who are over age 50 are still paying a monthly mortgage payment, are still likely to have at least one child – even a grown child – still living at home, and are not able to rely on Social Security or other types of investment or pension income.
In fact, there are many today who are still trying to recover the substantial portfolio losses they have endured over the past few years with the market and economic downturn. In addition, there are any number of other financial risks that can be faced today, no matter what your age. Because of that, having senior life insurance protection can provide peace of mind to your loved ones. Do not let your age hinder you from getting the coverage you deserve, there is even life insurance for seniors over 80, let us help you find the policy for your needs!
Why Have Life Insurance If You Are Over Age 50?
There are many reasons to purchase – or to keep your existing – life insurance coverage if you are over the age of 50. In the event that something were to happen, your loved ones would be stuck paying final expenses, as well as other potential debts such as medical or hospice costs that are incurred near the end of life.
Today, the cost of a funeral and other related costs can be in excess of $10,000 – especially when factoring in the price of a headstone, casket, flowers, transportation, and the memorial service itself.
Your family will be much better off being able to pay these expenses with the proceeds from a life insurance policy rather than needing to quickly deplete savings or sell assets – often at below market value. For these reasons, people over age 50 will often purchase a final expense policy or a burial insurance policy. These policies can provide the funds that survivors need to quickly pay off the high cost of funerals and other
You may also have other unpaid debts – regardless of your age. Credit card balances and other personal debt obligations can add up. Add to that any balances that are left on auto loans and other unpaid debts, and survivors could be left with a substantial financial hardship for many years in the future.
In addition, life insurance death benefit proceeds are often used to pay estate taxes. Although the estate tax was repealed for the year 2010, in 2011 it came back. Therefore, the possibility of having an estate tax liability – even for those who are not extremely well off – are very real.
Estate tax liability can often take more than 50 percent of one’s entire estate value. If there is not money that is readily available for paying the taxes due, survivors will oftentimes be required to sell off precious family heirlooms – typically at the below-market price – in order to obtain the needed cash.
Those who are over age 50 will often also consider giving more to charity. Life insurance could offer you an ideal way to do so. For pennies on the dollar, you can contribute much more to the charity – or charities – of your choice through life insurance proceeds. This provides you not only with potential tax savings but a much larger donation to charity than most people would be able to contribute in cash.
If you own a business, age 50 or over is the perfect time to set in motion your succession plan. One way to do so is to purchase life insurance. That way, should you pass away suddenly, the business will be able to go on, using the policy proceeds to pay business expenses as well as to keep the business afloat while a suitable replacement can be found.
A Potential Savings Vehicle
Another consideration for having life insurance if you are over the age of 50 is the savings option that a permanent life insurance policy can provide. Whole life policies, for example, allow you to build up a cash reserve, tax deferred, that you can draw upon in a variety of different ways.
In fact, between the years of 1991 and 2011, research has shown that the annualized cash value returns for certain policies from major life insurance companies ranged from between 2.62 percent and 4.44 percent.
Also, this amount is tax deferred and it includes the portion of your life insurance policy premiums that go towards the payment of your death benefit protection as well as other insurance company expenses. And, although these returns may not have sounded like much several years ago, the cash value in whole life insurance policies allowed policy owners to weather the storm of the recent market downturn. Many of these policy holders still maintain their cash value in these policies. Many investors in the stock market, however, were not so lucky.
Cash that is saved in a life insurance policy can be used for any number of purposes, such as providing funds to loved ones for college expenses, weddings, or even a down payment on their first home.
These tax-advantaged funds may also be used as a supplement to your retirement income. Today, with retirees living longer than ever before, retirements of 20, 30, or more years, filling in an income “gap” could be essential. When other savings and investment avenues run out, a cash value life insurance policy could be the perfect retirement income solution.
The Primary Uses For Life Insurance For People Over 50
Certainly the primary reasons to obtain – or maintain – life insurance over age 50 include protection for your family, and protection for your business in the event of your death. These tax-free funds will alleviate your family from the additional stress of financial issues during an already difficult time. And, the proceeds earmarked for the protection of your business will allow your company to continue – possibly for generations to come.
For those who are interested in donating to charity, life insurance can provide the perfect way to give a lot of funds in your name for the purpose of supporting a favorite charitable organization. By making the organization the beneficiary of your life insurance policy, the entity will benefit in ways that you may not have been able to make possible through the donation of funds during your lifetime.
If you’re looking for a great way to leave behind a legacy with your favorite charity, a burial insurance plan is a great way that you can do that. While you can easily set them up as the beneficiary, make sure that your family and loved ones are going to have the resources that that they need before establishing an organization as the benefactor.
How To Find The Best Life Insurance Coverage
If you are seeking life insurance coverage for people over 50, there are numerous different options that you can choose from. The first step in choosing a policy, however, is to determine whether to go with term or permanent coverage.
Term life insurance provides pure death benefit protection only. This is why term is considered to be the most basic of life insurance coverage. Term can be purchased for a set number of years – or terms – of 10, 15, 20, or 30 years, depending on the applicant’s age and health condition at the time of application. Provided that a person is healthy, term insurance can be a very affordable way to obtain life insurance coverage.
If a person’s term insurance policy expires, however, and he or she still wishes to remain insured, then they will need to re-qualify for coverage again at their then-current age and health condition. Because they will be older then, the new policy premium is likely to be much higher.
Permanent life insurance provides death benefit protection, as well as the opportunity for the insured to build up savings through a cash value component within the policy. Cash is allowed to grow on a tax-deferred basis. This means that no tax is due on the gain until the time that funds are withdrawn. These policies tend to be much more expensive but a good option for people with very specific needs when it comes to taxes.
Because the policy holder is putting money towards both the death benefit and the savings component, the premiums on permanent life insurance are typically higher than those of a comparable term insurance policy. These premiums, however, do not increase at all throughout the entire life of the policy. Therefore, once insured locks in, he or she could essentially pay the same premium amount for life.
How Much Will Life Insurance Cost?
The cost for a life insurance policy on a person who is age 50 or over can vary based on a number of different parameters. Some of these can include the type of policy, the amount of coverage, and the insurance company that the policy is being purchased from.
Additional factors can include the applicant:
- Height and weight
- Smoking status
- Health history
- Family health history
- Occupation and income
- Foreign travel habits
- Dangerous / risky habits
Prior to a policy decision being made, you may be required to take a paramedical exam. This typically entails submitting a blood and urine sample. These samples will be reviewed by the life insurance underwriters in order to determine whether your health may pose an additional risk to the life insurance company.
If you are considered to be of average health, you will likely be accepted as a Standard policyholder, and will thus be charged average policy premium rates. If, however, you have various health issues, you may be deemed as a Substandard policyholder. Although you may be accepted for life insurance coverage, it is possible that your rate of premium could be higher than the average. If however you feel that your health will keep you from qualifying for a traditional medically underwritten policy, there are other options out there, such as a no medical exam life insurance policy or a guaranteed issue policy.
On the other hand, if it is found that you are in better than average or excellent health and that your overall health history is also excellent, then you pay be approved as a Preferred policyholder. In this case, it is possible that you will be charged a lower than average policy premium rate.
Finding The Best Quotes On Life Insurance
Purchasing life insurance for people over 50 may require more research than buying a policy for a younger individual. However, working with a company or an agency that has access to more than just one life insurance carrier can help you in finding the very best coverage for your specific needs – as well as for your budget. This is because you will be better able to compare directly policies, benefits, and premium prices in an unbiased manner.
When you are ready to begin your shopping, we can help. We work with many of the top life insurance carriers in the marketplace today – and we can assist you in obtaining all of the important information that you need quickly, easily, and conveniently, all from your home computer, and without the need to meet in person with a life insurance agent. If you’re ready to begin the comparison process, just simply fill out the form on this page. For more information on life insurance companies, we have several company reviews on our site for your reference, such as a Gerber Life Insurance Company Review and a Mutual of Omaha Company Review.
Should you have any questions along the way regarding life insurance for people over 50 – or even about life insurance in general – our experts will be happy to help. We can walk you through any of the details that you need in order to make a well-informed life insurance buying decision. We can be reached directly via phone by calling, toll-free, 888-389-8676.
We understand that the purchase of life insurance at any age can be a big decision. There are many variables to consider – and you want to ensure that you have all of your needs protected properly. So, before moving forward, give us a call – we’re here to help.
There are dozens of different kinds of plans that you can choose from, all of them have advantages and disadvantages that you’ll need to consider before you buy the plan that meets your needs. It can be confusing trying to find the best plan for you, but we are here to help. Our agents have years of experience helping applicants connect with the perfect plan to meet their needs.
Not only can we walk you through the decision making process, but we can also help you find the lowest insurance premiums for your policy. Finding the right company could save you hundreds of dollars on your insurance coverage. Because there are thousands of different companies on the market, you could spend weeks and weeks looking for the best plan for you, or you can let us do all of that work for you. We can bring all of the best rates directly to you. No hassle. No hours wasted on the phone.
While most applicants in their 50s don’t think they need life insurance any more, in most cases, they couldn’t be further from the truth. At any age, life insurance is one of the most important purchases that you could ever make for your loved ones. Without that coverage, you could leave your loved ones with a massive amount of final expenses, which can make an already difficult situation a thousand times worse.
You never know what’s going to happen tomorrow, which means that you shouldn’t wait any longer to get the insurance protection that your family deserves. Our agents can make the process as quick and simple for you. It’s our mission to ensure that you have the best burial insurance plan. If you have any questions, please contact one of our agents today.