Term Life or Permanent Life Insurance Over 50?
Many people over 50, or even well into retirement years, are considering the purchase of a new life insurance policy. Some people associate life insurance with younger people, but some of us reached middle age with many of the same obligations we had when we were younger. We are just older now, and we find that policies are a little tougher to find and more expensive when we do find them.
So how do we consider the alternatives now, and decide between term vs whole life insurance policies? And why do older people need to purchase a policy anyway?
We may have planned to pay off our mortgage and get our kids off on their own. But those things got delayed, and we do not have any coverage on our own lives. Why aren’t we covered? Well, we may have had a term policy that, thankfully, we outlived. Or we may have lost our group life insurance when we retired, quit, or were terminated.
Let’s consider some a few things before we start shopping for new coverage.
- Term is Cheaper- Term premiums are bound to be lower than permanent life insurance premiums. Since we are older, and are rates are also likely to be a lot higher than they would be for a 35 year old,that is not trivial. But maybe we have a way to buy time. You can purchase term that is convertible to life without showing evidence of insurability. That means you could buy cheaper term now, and then decide to covert it to whole life in the future.
- Why Do You Want Life Insurance Anyway? This questions is not trivial either. Do you just want coverage, or do you want to leverage other features of some policies like estate and asset building? If you want to use your policy as an asset, maybe a permanent policy would serve you better.
When you sit down with an insurance agent or financial planner, make sure you have some clear ideas about your reasons for purchasing your policy. Consider your immediate need for coverage, but also think about the future. Be very wary of any insurance professional who only fixates on one type of product without comparing other alternatives. He or she may be more interested in meeting sales goals than service you in the best way.
You should also walk in to any appointment with an idea about the cost of life insurance.That way you will not be surprised or make an impulsive decision that is just based upon the premium.
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