Sponsored Guest Post.
I was chatting to some mates the other day about the morbid side of getting older and the topic of Life Insurance came up.
“Well if my hubby has life insurance, why do I need it too?” asked one of my friends.
If you’ve got no dependent children still living at home, a mortgage that may be fully or almost paid off and some savings put aside for the future, you may wonder if it’s worth having life insurance at this stage in your life. I know I do.
So I asked the experts and Sally from Life Insurance Comparison came up with some great advice about this topic to help you decide whether you need it or not.
Life Insurance after 50
Depending on your financial situation, it may still be beneficial to have at least some degree of life insurance protection to allow you to continue to meet your regular outgoings, pay off the mortgage and any other debt you may have, save for retirement and support adult children if ill health means that you or your spouse is not able to work.
Even if you consider yourself to be in a good financial position, it’s also worth bearing in mind that funeral expenses can be a big burden for your family in the event that you or your spouse were to die without putting anything aside for this.
Types of Life Insurance
There are several different types of life insurance, each of which could prove invaluable in certain situations:
General Life Insurance: When most people think of life insurance, this is the kind that is most likely to spring to mind. This offers a lump sum for beneficiaries of the policy if the policyholder dies or is diagnosed with a terminal illness.
Income Protection Insurance: This type of cover can provide all-important peace of mind if you are still working and worry about how you would meet your outgoings and save for retirement if ill health meant that you were not able to earn. Up to 75 per cent of your income can be protected while you are not able to work.
Trauma Insurance: This type of cover pays out if the policyholder is diagnosed with a particular condition that is included on the policy. This usually includes major illnesses such as cancer but often only covers a set number of conditions. It is also known as Critical Illness Insurance.
Total and Permanent Disability Insurance: If you become permanently disabled and cannot work because of this, TPD insurance can provide a lump sum payment. This can be used to pay for rehabilitation costs, debt repayments and general living expenses, for example.
Buying Life Insurance in Your 50s
Because age is one of the factors that has an impact on life insurance premiums, it is generally more expensive to buy cover as you start to get older. This is because insurers see you as a bigger risk due to the link between age and some medical conditions and fear that this makes you it more likely that there will be a claim on the policy. This doesn’t mean that you won’t be able to buy life insurance but you should be aware that your age and health will affect the costs. It’s important to be completely honest about your medical situation when you apply for life insurance as failure to do this can mean that your claim will not be successful.
Is Life Insurance Worth It for Over 50s?
If you are in poor health and/or there is a family history of conditions such as heart disease and cancer, you may not see the point of buying life insurance – especially if you have already paid off the mortgage, have no financial commitments with regards to adult children and have been able to build up significant retirement savings.
However, most people would still struggle financially if they were unable to work due to ill health – even if this is not a permanent prospect. If this is the case for you and your savings would not see you through for very long, it can be worth looking to buying some form of life insurance as peace of mind if the worst were to happen.
Want to see where things stand? At LifeInsuranceComparison.com.au
Do you have any kind of life insurance? What are your thoughts on this subject?