Life Insurance Cover for Over 50's
Explanation of Best Policies and Options Available for Seniors
Jun 29, 2009
At the age of 50 or over, many people have grown children who have moved out of home and may have their homes paid for at this stage, so why would someone over 50 require life insurance?
Reasons to get Life Insurance Over 50:
- Mortgages or loans may still be outstanding and can be settled by an insurance payout in the event of one's death.
- Funeral expenses can be covered with the money paid out by a life insurance policy.
- Sometimes other family members such as grown children will purchase a policy for their parents. They do this as a way to plan for the future when their parents are not around.
- Job losses or financial downturns may have caused savings to stop growing.
- With financial troubles in the world, many older kids are returning home or one may be supporting one's own parents which can make life insurance necessary.
- Leaving cash to beneficiaries. Most of the time life insurance payments are not taxed, so this is a way to leave some cash to heirs which they can keep or use to settle debts.
What are the Limitations for Over 50 Life Insurance?
It is more expensive to take out life insurance over 50 but the expense may be worth it compared to the prospect of one's partner being landed with debts in the event of one's death. Health related questions will go back for perhaps 10 years or more and may include questions on immediate family heath issues. Smokers will be penalized and one can be expected to submit to a blood and urine test for larger insurance amounts ($50 000 or more).
What Over 50 Life Insurance Policies are Available?
Term life insurance is lower cost insurance because it has a limit such as 10, 15 or 20 years. At the age of 50 or over, most companies will not insure one for longer than 20 years.
- Life insurance over 50 policies are sometimes referred to as senior policies or called final expense. These policies are smaller face value whole life policies designed to provide affordable cover for older people and which will not expire as long as the policy is kept in force.
- Simplified issue life insurance policies are policies where there are fewer health related questions asked by the insurer and older people can qualify a little easier. Also these policies usually provide an immediate death benefit at an affordable rate.
- Guaranteed issue life insurance means that the insurer will waive health questions. But be careful because instead of asking health questions, these policies use a waiting period of up to three years before the policy is in full force and in the meantime, should the insured pass away, the beneficiaries will only receive refunded premiums plus interest or a percentage of the whole face value. Also, the premiums will be higher than simplified policies.
If one has financial obligations such as a mortgage or dependents who are counting on one to pay for college, the best life insurance policy to buy is a standard term life or whole life policy in an amount that can cover a number of family needs, including final expenses.
One should also always ask one's broker or agent for proposals from at least three to five highly-rated companies to get competitive quotes for over 50 life insurance policies. A qualified financial planner should be able to shop around for the best deal.
Related Articles on Insurance:
Life Insurance Policies - Making the Best Choice
Affordable Dental Insurance Plans
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