Life insurance can work well for people of all ages. However, getting life insurance over 50 can be particularly essential for ensuring the policyholder’s loved ones receive the financial security they need in case the policyholder passes away. According to LIMRA’s 2022 Insurance Barometer Study, 53% of Americans aged 45 to 64 have life insurance, and 57% of those aged 65 and older own a policy.
Getting a life insurance policy over 50 can bring challenges since potential policyholders may not be approved as easily or pay higher premiums than younger policyholders. Fortunately, there are a few ways life insurance shoppers can get a policy that fits their unique situation. This article will discuss five tips for getting life insurance quotes over 50 so people can find the right policy for their preferences and needs.
1. Consider coverage needs for one’s partner and adult children
Many life insurance policyholders get a policy to cover their spouse and children if they pass away. Prospective policyholders over 50 should consider the needs of their spouse and children, even if their children are adults.
Keep in mind that the circumstances may be a bit different since their adult children are most likely self-sufficient. So, the policyholder may want to consider their children’s needs from an estate planning perspective.
For instance, the death benefit is tax-free to beneficiaries. This can help the policyholder keep more of their wealth away from taxes, passing more on to their heirs. Additionally, it provides more funds to cover debts the policyholder might leave behind. Grandchildren are another consideration. If the policyholder has grandchildren, the policyholder might want to bump up the death benefit to help fund their college.
2. Know the types of policies available
Term life insurance lasts 10 to 30 years, depending on the policyholder’s choice. The policyholder risks outliving the policy, but premiums are cheap. On the other hand, prospective policyholders over 50 who want more peace of mind can get permanent life insurance. This type of policy is more expensive, but coverage lasts a lifetime if the policyholder keeps up with premiums.
Permanent life policies also come with a cash value growth component. Part of each premium goes into it, which then grows tax-deferred at a certain rate depending on the policy type. Policyholders can borrow against it, withdraw from it, or surrender the policy to receive the full cash value minus surrender charges when it grows enough.
There are various permanent policy types, such as whole life insurance, variable life insurance, and universal life insurance. Each differs in how premiums, death benefits, and the cash value are treated.
3. Consider riders if needed
Riders are policy add-ons policyholders can purchase to customize their coverage. For example, a long-term care rider allows the policyholder to receive some or all of their death benefit while alive to pay for expenses associated with long-term care.
Another example is an inflation rider. This increases the policyholder’s death benefit every year to keep up with or beat inflation. As a result, the policyholder can protect and grow the value of their death benefit.
4. Research customer service reviews
Life insurance is a worthy but significant investment. So, the insurer the policyholder chooses should be helpful and easy to work with. Policyholders should look at customer service reviews online to screen for the best life insurance providers. Low ratings and consistent complaints could indicate that the life insurer is not easy to work with.
On the other hand, policyholders should try to find names with higher ratings and many positive reviews. These indicate that a potential policyholder will likely have a positive experience with the insurer.
5. Shop around
Life insurance can be more expensive for policyholders over 50 than for younger policyholders. Potential policyholders should shop around with many insurers to gather multiple quotes. This allows them to find who offers the lowest rates on the coverage the customer needs. Plus, it can help prospective policyholders see what other types of options various insurers offer in terms of policy types and riders.
The bottom line
Getting adequate life insurance coverage over 50 may take a bit of extra work, but it’s not much different than at any other age. Potential policyholders should consider the coverage they need for their spouses and adult children. They should also understand the policy types and riders available to determine what type of policy to go after.
Finally, they should shop around for multiple quotes and research customer service reviews. This can help potential policyholders lock in the best rates on the coverage they need with a life insurer that’s easy and enjoyable to work with.