Some people buy life insurance so that the payout can pay off their mortgage when they die. Others do it to have a comfortable sendoff while majorities do it to replace lost income when they pass away. You’ll realize, however, that life insurance premiums get expensive with age. It is costlier at 50 and above than at 20 or 30. So, do you need this coverage when your children are already adults? And, how can the payout help the people you leave behind? Let’s answer the questions below.
Reasons You Need Life Insurance Over 50
Overall, you require life insurance over 50 for the following reasons:
1. Financial Gift for Dependents
You can pass your life insurance benefits to your dependents as an inheritance gift. The lump-sum payout can help them invest, buy a property, or start a business. It will give them the financial freedom to start anew when you are no longer there to provide for them. What’s more, it acts as a replacement for your pension.
2. A Solution to Standing Debt
There are different kinds of debts that your life insurance benefit can help to clear. Popular examples include mortgages and estate taxes. The good news, though, is that you can protect those you leave behind from the stress of having to sell properties to pay off what you owe. Life insurance is also essential if you are a cosigner to a loan. The money can pay off a cosigned loan.
3. Funeral Benefits
Sometimes burial expenses exceed $10,000 if you factor in things like urn or casket, a burial land, headstone, and funeral mass. Since death is an unexpected event, the funeral cost can overwhelm the people you leave behind. Though life insurance payout may not bring you back into their life, it can make the sendoff less stressful.
4. Fixed Payout
Unlike when you are young, an over-50 life insurance policy attracts fixed premiums. So, it means you can expect to pay the same amount until the end of your term or until death. More to it, the payout is fixed. In this case, your dependents know what to anticipate when claiming death benefits.
5. Acceptance Guaranteed
The biggest challenge of buying life insurance when you are young is that there are many health restrictions. You have to pass specific medical tests to be eligible. Fortunately for the elderly, the over 50 policies do not have such restrictions. So, you are almost guaranteed acceptance upon application.
How Much Does Life Insurance Cost After 50?
Generally, there is so much flexibility when picking a life insurance policy. As you reach 50, expect to pay higher premiums, and the curve continues to rise as you get older. For example, expect a $5,000-death benefit plan to cost you about $16/month (when in good health) or $20/month (when your health is not a factor) when you are 50 and almost double this when you are 65.
You should also note that the monthly premiums depend on gender just as much as health and age. Ideally, men pay more than women of the same age and health status. For instance, a 60-year old healthy man should expect to pay about $43/month for a $10,000-death benefit policy while a healthy woman of the same age is expected to pay about $33/month.
The other cost determinant is the duration, and this brings us to term life insurance. From the name, term life insurance is for a specified period. If you don’t die within the time, which we all pray for, you must renew the policy for your dependents to continue being eligible for the payout.
When at 50, you are eligible for a 20-year and a 30-year renewable term. However, you only qualify for a 20-year run when you get to 60. Usually, an extensive-term length attracts higher premiums, and this is probably the major downfall of life insurance after 50.
Life Goes On
No doubt, life insurance is still dependable even after 50. Your loved ones stand to benefit when you are gone, and this is the pride of every parent, child, or benefactor. Remember, though; most insurance companies expect you to contribute for at least a year before your beneficiaries can be eligible for a payout. So, start to contribute now.
