1. Compare costs
Older policyholders will face higher premiums, so it’s important to compare costs and coverage between policies. One of the best ways to do this is to research multiple life insurance quotes online. Policyholders can save time and easily compare premiums from different insurers.
2. Consider Policy Types
People over 50 have access to different types of life insurance policies. Here are some of the most popular:
Term life insurance
Term life insurance provides coverage for a fixed period, usually between 10 and 30 years. If the insured dies during this period, the insurer will pay a large death benefit. However, if the term of the policy ends while the insured is still alive, he will have to take out a new policy. Many term life insurance policies are often less expensive than permanent policies and offer similar levels of coverage.
Permanent life insurance
Permanent life insurance is more expensive than term life insurance, but it provides guaranteed coverage for life, as long as the insured continues to pay premiums on time. Permanent policies also have cash value growth components. A portion of each premium paid by the insured is allocated to this component, which increases tax-deferred at a certain rate, depending on the type of policy.
Once the cash value becomes large enough, the policyholder can withdraw it, borrow against it, or, with some policies, pay premiums with it. When policyholders surrender their permanent policies, the insurer pays out their cash value minus the surrender charge.
End-of-stay expense insurance
End-of-life expense insurance is a small, whole-life insurance policy designed to help beneficiaries pay for the end-of-life expenses of the insured, such as funeral expenses and medical expenses.
Final expense insurance policies are much cheaper than full permanent policies and have cash value. They don’t often require a medical exam, making it easier for people over 50 to qualify.
3. Understand coverage needs
An insured person’s coverage needs depend on their income, expenses and beneficiaries. Policyholders should generally receive a death benefit of seven to ten times their income. However, policyholders with multiple beneficiaries, such as children, may wish for more extensive coverage.
If a policyholder has multiple beneficiaries or longer-term expenses to cover, it may be a good idea to consider a larger death benefit. For example, policyholders with mortgages and car payments should consider these debts, as their beneficiaries may need additional funds to pay them off.
Getting the Right Life Insurance Policy After 50
Purchasing life insurance after 50 can seem daunting, but the process is pretty much the same. Older policyholders should think about their coverage needs and spend time comparing policies, as premiums may be higher. Weighing these factors closely and collecting multiple quotes will help people over 50 get the coverage they need at a pace that stays within their budget.
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