After 50 your life insurance needs may change. Unlike most types of insurance people buy life insurance to provide for someone else in the case they are gone. Traditionally, once you got into your 50s, a lot of people gave up their life insurance. However, Baby Boomers, depending on their financial situation, might still want to consider life insurance.
For most retirees, life insurance is an unnecessary expense. But there are scenarios in which continuing coverage is prudent. For example, life insurance in retirement might make sense if you have a fair amount of debt that you don’t want to burden your family with,
Another case would be if you continue to work during retirement, even part-time, to supplement your savings and wish to protect your spouse from the loss of your income when you die. The most important reason may be for income replacement. If you’re retired, your spouse may be financially dependent on your pension income; if you pass away, your pension could cease as well, leaving your spouse in a difficult financial situation.
So the first question in determining if you need life insurance over 50 is determining who is financially dependent on you. Then you must determine what amount of money would be sufficient to replace what you are currently providing for them. Some planners call this the “leaving a legacy” rationale for owning life insurance in midlife.
Life insurance for senior citizens can be important if you’re planning an estate or family trust, or if you still have business obligations. If you still have dependents, you may want to leave behind a financial legacy, and life insurance can help you set that up with ease.
It’s worth noting that newly issued life insurance policies, both whole life and term, get more expensive once you hit 50. Once you enter your 60s, if you want or need life insurance and you’re not already locked into a term policy, you may have no other option but to buy a more expensive whole life policy. Also, most insurers won’t sell term policies to people 65 and older.
The good news is that there are indeed companies that will treat you fairly well at 50. However, you can save money and give yourself more options by securing your life insurance policy before the Big 50.