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Do Individuals Over 50 Need Life Insurance?

If you are familiar with life insurance, then you know how important it is especially for individuals that are kicking off family life. Life insurance provides a buffer or soft landing for the young family, especially if their sole provider has taken out life insurance coverage.

The whole idea of life insurance is that in case the insured person dies, there will be an insurance payout by the insurance company, therefore allowing his next of kin to benefit from the life insurance coverage. The main reason why this is important is that in case the insured person dies, then his family will not be left to suffer in his/her absence. So makes sense for young families. 

The fact that life insurance coverage is best suited for young families raises the question of whether it makes sense for anyone to get life insurance over 50. This might be a valid question for many because they are already done raising children by the time they reach 50-years-old or at least their children are approaching adulthood at that age. So why then would anyone that has already lived half a century be interested in a life insurance?

Starting a family late in life

Subscribing to life insurance coverage at 50-years-old makes sense to those individuals who start careers at this age. It is not often but also not uncommon for people to have children when they are already in their 50s. In today's fast-paced world, it is not unusual for people to delay having children so that they can focus on their careers and thus have children in their 40s or 50s. They may thus opt to get life insurance coverage even when they are in their 50s so that their families will be protected in case of death.

Business succession

Life insurance coverage may play an important role for those over the age of 50 as a tool for business succession.course this makes sense for individuals that own businesses. Their life insurance policy payout can be used to make sure that the business remains afloat before the business is transferred to new ownership or management.

A supplement for their pension

Rental income or pension is often the only source of revenue for many families after retirement. However, pension payouts often dwindle, and sometimes the tap even runs dry in case the retiree dies. This means that the people dependent on the retiree might be left struggling financially. Anyone over 50-years-old who might be looking for another option to provide an extra revenue source for their family when they are gone should consider life insurance coverage. Life insurance policy payouts might be the most logical way to make sure that your family has some financial flexibility, even in your absence. 

Life insurance policy payouts can cover estate taxes

Estate taxes can be a huge burden to a family when their sole provider passes on. It might require the family to spend a significant amount of money to cover the estate taxes. Life insurance coverage is a good option for a backup plan that will help offset the burden of paying estate taxes. This is a burden that would have otherwise gone to the family after the owner of the estate dies.

Life insurance payouts can be used to offset funeral expenses

Reaching 50-years-old is a key milestone in life. However, it also means that one has probably surpassed the midpoint of their lifespan. In other words, the years ahead will likely be fewer than the ones that you have already lived. So this is why you need to start preparing for your death. It might sound a bit scary, but it is necessary. If you are the breadwinner in your family, then it is a good idea to look into how you can help your family reduce any expenses that may not only come with age but also your demise.  Life insurance coverage is ideal for this purpose because it will not only help to cushion your family in your absence but also help to cover your expenses, such as hospital expenses and funeral costs.

Supplementing your savings

Life insurance coverage may also present an opportunity for anyone over 50-years-old to access an avenue through which they can supplement their income. This is because a life insurance plan can be used as a way of storing cash which can then be used for different aspects upon withdrawal in the future. This is a good option for anyone that does not want to invest their money in other avenues due to the issues such as unpredictability and complicated nature of investment markets. The policyholder could relax knowing that their life insurance principal amount is not at risk of erosion as would potentially be the case if they had parked their money in the stock market which has its moments but also faces headwinds.

Selecting the coverage that is best suited for individuals over 50-years-old

There are two main life insurance coverage categories to choose from if you are over 50-years-old and interested in life insurance. They are permanent policies and term life insurance. Term life means that the applicant will subscribe to a life insurance policy that only offers death benefits. This means that it does not have savings or cash value benefits. 

Term life insurance is also made available for a fixed duration of time before it expires. Term life policies commonly last for five, 10, 15, 20, and 30 years. Permanent life insurance like the name suggests offered to clients who want permanent life insurance coverage, meaning that there is no expiry attached to such. It also offers more flexibility to the policyholder by allowing them to withdraw or borrow from the cash value of their insurance policy coverage.

The flexibility of the permanent life insurance coverage means that the policyholder can use the funds for purposes such as offsetting a loan or a down payment for a house. It is worth noting that permanent life insurance coverage attracts a higher premium than term life.