Do parents over 50 still need life insurance? Believe it or not, I still have people in their 50’s and 60’s still buying life insurance from me. I have been in the insurance business for more than 20 years and people who I sold 10 and 20-year term insurance to, are coming back to buy more insurance for the next 10 and 20 years.
Why? Well, because sometimes life doesn’t go as planned. 20 or so years ago we could only plan for the future and hope for the best. We could presume the mortgage would be almost paid off. The kids would be working or graduating from college and retirement would be just around the corner.
However, there was no guarantee that things would work out as planned and for many people they do not.
The old-fashioned way of thinking about life insurance was while you were working and your kids were young, if you died, a policy would go to your survivors to pay off the mortgage and send the kids to college. So, traditionally, once you got into your mid-50s, a lot of people thought life insurance was no longer needed.
Top 5 Reasons Parents Might Need Life Insurance Over 50
- Income Replacement – You’re still working and want to leave your spouse, partner or children a death benefit.
- Cover Your Debts – We are living longer nowadays and our financial obligations don’t just go away at retirement anymore. Many elderly people still acquire substantial debt during retirement. (See this article about Life Insurance For Parents).
- Leave A Legacy – Many parents feel that due to the recent recession and sluggish economy that their children will never be as well-off as they were. So parents over 50 are buying life insurance to leave money to their children.
- Estate Planning – You may need to liquidity to cover estate taxes so you can pass your wealth to your heirs without the Government taking more than their share.
- Business Insurance – You may want to cover outstanding business expenses, responsibilities and obligations.
How Long Do I Need Life Insurance In My Fifties?
Well, that depends:
If your goal is income replacement, you probably only need a 10 or 15 year term policy.
I would recommend a longer term policy if…
- You still have a 20 or 30 year mortgage
- You plan on working past the normal retirement age of 65
- You have accumulated significant debt and want your spouse/family to be debt free when you die
- You want to leave a legacy or cash to your children or grandchildren
If you feel you need a policy for more than 10 or 15 years, you should try to lock in a policy now for as long as you can. Most insurance companies will not offer a 30 year term policy to anyone over age 55. So if you feel your insurance needs are long term or will never go away, you should get a policy with the longest term possible for your age.
What Type Of Insurance Should I Buy?
As you can see up until now, I have been talking about level term insurance. The reason for this is because it is relatively inexpensive coverage and for most people it is affordable. But term insurance does have its limitations. When the term expires, your coverage ends.
If your needs are for the longer term, then a permanent policy such as whole life or universal life would be the best option. With this type of policy it will last your whole life or as long as you live. Just keep in mind, that the premiums will be significantly higher – possibly 5 to 10 times more expensive.
If you are buying life insurance for estate planning purposes, then there is no way term insurance is appropriate. You need permanent insurance to make sure the policy will last as long as you do so the estate will receive the proceeds when you die.
If you are married, then a 2nd to die policy would work best because the insurance would pay off on the last survivor (your spouse) and the premium would be cheaper because it is based on 2 lives.
Will I Qualify For Life Insurance If I Am 50?
Let’s face it, you were probably much healthier when you were younger. Your medical file was probably only a few pages but now it’s a short novel. It’s much easier to qualify for life insurance while you are young and healthy. But as we get older, the insurance companies are let’s say, more concerned with you dying.
To qualify for a policy you will have to:
- Complete an insurance company short medical exam
- Allow the insurance company to review your medical and credit history
- Provide a blood and urine sample
These requirements are for $50,000 to $500,000 of coverage. If you want to apply for more coverage, other requirements could include; An EKG, Chest X-ray and more.
A Few Final Tips
Life insurance for parents over 50 is not cheap but you can compare rates by filling out the form on this page. Select “standard health class” unless you are extremely healthy. Don’t put too much faith in the initial quote until you speak with an experienced agent. Call: 914-633-1717
Getting life insurance for a 30 year old is much easier than for a 50 year old. You should not leave this task to an agent or a company that does not have experience in working with older folks. (I know you don’t feel old but you ain’t that young either!).
There are also insurance companies that specialize in affordable life insurance policies for people 50 and older so knowing which company(s) to apply to is very important. Again, this is not a job for the newbie agent or one who does not specialize.
When shopping for life insurance, it’s important to shop the rates and premiums from several different insurance companies to find the best insurance plan for you. There are many competing insurance carriers, and it’s best to use an agent who will know where to get you the best deal, particularly if you have previously been turned down for coverage or have any medical conditions.