Unlike most types of insurance, you typically buy life insurance to take care of your loved ones. Once you reach a certain age, you may think it’s too late to purchase universal life insurance. After you turn 50, the kids might be grown and financially secure, or your mortgage might finally be paid off. If so, you may be considering reducing or eliminating your life insurance coverage.
On the other hand, you may have a disabled dependent or a medical condition that might require you to hold on to your life insurance. US News reports that life insurance needs definitely change after retirement, but cautions that you might still need a policy. If you’re not sure if you need life insurance once you are over 50, there are a few things that you need to consider. Is it worth getting life insurance after 50?
The first thing that you should consider is your financial dependents. Should something happen to you at this point in your life, is there anyone who would be in a dire situation should you not be there to support them? Financial dependents could include a spouse, children, parents, or a sibling. If you’re a policyholder with a life insurance company and you’re not behind on your premium payment, this could take care of your dependents.
You will need to figure out what your dependent would do if you were gone. It may be that your spouse would be fine if there are other means of income such as retirement, investment accounts, social security, or other forms of income. If there is no one who is financially dependent on you, you may still want life insurance if you would like to provide for someone. For example, some continue to pay a monthly or annual premium on a life insurance policy even as they age so that they know a set amount will be paid to their children upon their death.
Other parents just decide that their adult children will get whatever is left. If there aren’t any financial dependents that your death would create a financial hardship for, life insurance after 50 is a personal choice.
Life Expectancy After 50
Other than financial dependents, there are other factors that are changing the way that people feel about life insurance after 50. The predominant reason is the increase in life expectancy. People are living longer. According to the Social Security Administration, a 50-year-old can expect to live 29 to 33 more years, on average, and one in three could live into their 90s. Not only are people living longer, today, but they also tend to be more active and in better overall health than other generations.
As a result, aging is becoming less about exchanging work for leisure. Instead of transitioning into retirement, older Americans are now transitioning into part-time work, entrepreneurship, and even encore careers. Given the fact that people are living longer and staying active and even working much later in life, it might make financial sense to have life insurance that could be needed over the next additional 30 years.
Getting Life Insurance Over 50
At any age, to get life insurance you must go through an underwriting process. This process requires you to answer health questions and can also mandate that a nurse perform a physical exam. If you are in great health and younger in age, the underwriting process should be no problem. If you are over 50, insurers may see your age as an increased risk. You may be able to get life insurance but you will have to pay more for it than if you were younger.
Determining the right amount of life insurance will be important. The more you buy, the more it will cost. A younger person with a brand new mortgage and two small children would be compelled to purchase a large life insurance policy.
While a 50-year-old might be in need of life insurance, it is something that should be given some thought. Your needs and financial plan have changed over the years and it might not be the needed peace of mind of that it once was. A little research and discussion with your loved ones will help you decide.