You have many items to look forward to inside your 50s – going for a bucket list trip together with your partner, trying your hand in a new job (as you have the flexibility to do this), and enjoying the fruits of the labor from the first half-century in your life.
Overall, it is a time to bask in the financial security you've been working to create through the years and ensuring you're on the right track for retirement. With regards to smart financial planning in your 50s, does life insurance have a rightful place in the mix?
If you purchase life insurance coverage inside your 50s, it will cost significantly more – there's no way around it. Should you no more have financial dependents and have enough savings to cover debts or final expenses, a term life insurance coverage may be a pointless expense.
But, when you are in your 50s with people who depend on your earnings to survive, then buying more life insurance coverage might be the right move for you.
When life insurance coverage inside your 50s makes sense
Real life does not happen on the set schedule.
Not everyone starts a household in their 20s and it is approaching empty nest status by age 50. Not everyone has sufficient money saved for that unexpected or retirement.
The average chronilogical age of first-time mothers has been increasing steadily since the 1970s, and, the average American has under $1,000 in savings. These trends indicate that there are more and more people within their 50s with young, financially dependent children. And, many of them do not have sufficient money to financially support their families during an unexpected illness, layoff or even the loss of a partner.
If the scenarios above resonate along with you, then buying life insurance coverage can be a smart decision that may provide you with much-needed peace of mind.
A life insurance policy is really a contract between you and also an existence insurance company that can help financially protect your loved ones if you pass away. You have to pay a regular monthly or yearly premium and when you die while the contract is in place, the insurer pays a death benefit (policy payout) for your beneficiary. Your beneficiary (or beneficiaries) may use the policy's death benefit to help cover funeral expenses, meet day-to-day bills, arrange for the near future or make use of the money for anything they need.
Even without having children (or financially dependent children), life may take unexpected turns – it has a practice of doing that, in the end. Perhaps it is taking longer to repay the mortgage, or a financially dependent spouse requires a safety net until she or he makes it to retirement age. It doesn't matter what it's, it's important that you simply determine your life insurance needs.
Life insurance options for people in their 50s
When you're older, a new life insurance policy is more expensive. That's only the way policies work. So if you're trying to find the kind of peace of mind life insurance coverage can offer, you need to consider your coverage needs carefully, ensuring you're getting the policy that's perfect for the family which you're also not overpaying for coverage.
Term life versus whole life insurance
Term life versus whole life is an age-old debate with advocates for sides. Here's the fundamental run-down of the differences between term life and permanent life insurance:
A term policy, as the name entails, provides life insurance coverage for a set period – usually 10, 15, 20 or 3 decades. Its purpose is to help financially protect your loved ones during the years they need it most. If you were to die throughout the entire term, your beneficiary would get the policy's coverage amount. Once the coverage term length ends, you are able to choose to renew it, but since your rates will be based in your age, the life insurance premium will cost much more. Ideally, you would not have to renew it because through the years you have created an adequate financial cushion with no longer have dependents (like young kids) who rely on you to support them.
A whole or permanent policy lasts throughout your life, and it provides a cash value component that can grow over time. An entire life policy costs significantly more per month – between 5 to 20 times over a term policy – but the life insurance coverage doesn't end. Because of the complexity of whole policies, buyers should work with a financial professional to buy and maintain an insurance policy.
In your 50s, term life coverage is going to be, by far, your less expensive option. For example, a 15-year, $250,000 Haven Term policy would begin at about $45 per month for any 50-year-old man in excellent health. For a lot of, that might be ample time for children to reach adulthood or perhaps a spouse to achieve retirement. A $250,000 whole life policy, that is coverage that would serve you for a lifetime, for that same man would start at about $534 per month, based on State Farm's website.
Choosing the best policy and term length
Typically, if offered, a 30-year term would be fairly expensive. Most people in their 50s opt for 10-, 15- or 20-year term policies.As previously noted, a 15-year, $250,000 Haven Term policy would begin at approximately $45 per month for a 50-year-old man in excellent health. That price would increase to about $56 per month having a 20-year term length. A 30-year, Haven Term policy is not offered to individuals their 50s.
Because life insurance coverage premiums are more expensive inside your 50s, it's even more vital that you ensure you're getting precisely the correct amount of coverage. Too little can make you wishing you had purchased more. An excessive amount of coverage can mean you're overpaying with money that might be better used in preparing for retirement or building an emergency fund. An existence insurance calculator can help you figure out how much coverage is needed for your family. It'll help you estimate the cost.
How to buy life insurance coverage online
Buying high-quality insurance coverage is easier than ever because of today's technology. You are able to calculate your requirements, get a cost estimate, apply online and have an immediate decision on coverage eligibility. Forget about waiting weeks for a decision.
With an online-centered lifestyle insurance, algorithmic underwriting is usually accustomed to accelerate the decision-making process. In some cases, an existence insurance health check will not be necessary to finalize coverage. The objective of the health check would be to assist the insurer determine the right price for your policy. While it's one of the only offline aspects of Haven Life's application experience, we still take every effort we can to make the process streamlined and painless.
The health check itself usually takes about 20-30 minutes. You are able to schedule your appointment online or over the telephone. The examiner can setup a meeting in your own home, your home of business or an exam office. Oftentimes, you will have temporary insurance coverage to carry you over until the exam is finished and policy is within force.
When you may not need life insurance in your 50s
Simple economics says you shouldn't pay for something you don't need. It doesn't matter if you're talking about cell phone data, cable channels or, yes, life insurance.
If your mortgage is paid off, your kids are out of college, and also you as well as your partner have a financial amount of money for retirement and emergencies, then life insurance coverage may be an unnecessary expense.
Building a safety net for your family at any life stage
When you're young and merely starting a family, life insurance is often a no-brainer. Twenty and 30-year- olds usually have lovers to maintain and obtain the best life insurance rates available.
With age comes more complexity around your lifetime insurance needs. And, in your 50s, a new life insurance policy may not be the very best technique to protect the people you love financially – rates are higher, and you'll have other financial assets such as property, investments, and savings, which may be used. However, in case your partner relies on your earnings, life insurance coverage might help replace it and allow her or him to comfortably retire. A financial planner might help work things out if you're not sure. But the world is constantly changing, and never all paths to financial security travel exactly the same route.
If you are in your 50s and therefore are concerned that the partner or children will face financial uncertainty if they lost you unexpectedly, it isn't past too far to get quality life insurance coverage at a reasonable cost. Knowing you'll need coverage, you can start the process for you personally and your loved ones through getting a free life insurance coverage quote.