Can I Still Get Affordable Life Insurance If I’m Over 50?
Life insurance is important for individuals at any age. If you are over 50 and still do not have coverage, it is not too late. Clearly, coverage for individuals over 50 costs more than those in younger age groups, but there are some factors in your favor that can help offset these costs.
Assessing your Life Insurance Needs: Before shopping around for a life insurance policy, you need to assess your needs and determine how much coverage is necessary to take care of all your obligations. For those in their 20s, 30s, and even 40s with children, a life policy should include enough to cover your annual income for the years remaining until your youngest child turns 18. This alone can add up to several hundred thousand dollars, and that is before taking into account paying off the mortgage, retiring other debts, and funeral expenses.
Many individuals over 50 do not need nearly as much life insurance coverage as those who are younger. For example, if your children have already turned 18, you will not need nearly as much insurance for income replacement. You may also be much closer to paying off your home mortgage than when you were in your 20s and 30s. In a typical scenario, being over 50 can reduce the amount of life coverage needed from $750,000 down to $250,000. This can often more than make up for the higher premium you pay because of your age.
Aside from age and coverage level, there are some other factors that can help keep the cost of life insurance lower if you are over 50. First of all, the majority of your coverage should be term insurance. Term life insurance is straight coverage in a policy that does not accumulate any cash value. You may also want to consider a small whole life policy (of roughly $10,000 to $15,000) just for funeral expenses, but the rest can be term coverage.
Here are some other tips to save money on your life insurance coverage if you are over 50:
Act Sooner: With each birthday you celebrate, life insurance rates go up. Term life rates are simple from an actuarial standpoint, and they are set based largely on life expectancy. So the sooner you buy, the sooner you can lock in the term rate for your current age.
Stay Healthy: Another reason to purchase life insurance now is you never know what kind of health challenges you may face in the future. If you are healthy today, it is best to take advantage of your good health by getting covered.
Shop Around: There are numerous carriers that offer life insurance. Some cater to certain age groups, others cater to higher risk individuals, and still others cater to those who are in perfect health. The demographic they serve is a major determining factor in how they set their rates. For this reason, you will need to shop around to find the one that is right for you. The best place to start is to speak with a life insurance broker. Independent agents work with several of the top insurers in your state. Because they are not captive to a single carrier, they are able to freely and objectively shop for affordable life insurance on your behalf.