Often insurance needs change as people grow older. While buying term life insurance is often associated with younger adults, today people may work longer and live longer. This alters the equation of how much coverage may be needed to meet coverage needs. Whether you seek to cover final expenses or desire to create an estate for your family, there are many options to consider when exploring life insurance. This article highlights a few ways term life insurance might be an option for helping you achieve your goals.
The need for life insurance shouldn't be about your age, but about your individual needs and peace of mind. Buying a term life insurance policy after age 50 can help fund many later-in-life expenses that you may not have considered and can help preserve the retirement assets you've worked so hard for over the years.
1. Final expensesToday, the average American traditional funeral costs around $7,000. For many, this means having to dip into retirement savings in order to cover costs. You should (at the very least) have enough life insurance to cover final expenses. Be sure to include both funeral costs and potential final medical bills.
2. Leaving a legacyFor some, leaving a legacy means helping their children with a college fund or a down payment on a first home. For others, it might be supporting a charitable fund long after they pass away. A small term life policy can be an affordable way to leave a legacy for people and organizations near and dear to your heart.
3. Protection for your spouse
According to a recent retirement survey, 55 percent of Americans have less than $10,000 in retirement savings. Only 19 percent have $200,000 or more saved.1 The reality is that people are living and having to work longer for a comfortable retirement savings. So even though you may be of retirement age, your spouse may still need additional financial security to live on going into retirement after you die.
Yes, after 50 your needs are likely to change. And, yes, buying life insurance later in life means you'll be paying more for coverage based on your age and insurability. But consider that you might not need as much life insurance as you would have earlier in life - that means you might be able to buy less coverage (with a shorter term) and still obtain the coverage you need. For this reason, buying term life insurance may be a great asset going into your golden years. However, it's important to note that your beneficiaries receive no payment if you are still living beyond the expiration of your policy's term.