Life Insurance Needs Change after Age Fifty

There’s no specific age-related cutoff to help you decide when you’ll need life insurance, but once you pass age fifty, your needs may change. Here are a few things to consider:

What do you need insurance for? If you have a partner who is heavily dependent on your income, and few savings, you’ll probably need life insurance.

What are the options? There are two types of life insurance: term and whole. A term policy provides life insurance for a fixed period of time, from one to thirty years; if you die when coverage is in effect, the policy pays the beneficiaries listed on your policy a specific amount.

A whole life policy is permanent; assuming you pay the premiums, you will have coverage for your entire life. Whole life policies may also have a savings feature, whereby the money that goes into your policy is invested, and you can borrow against this cash value.

How does it work? With both types of life insurance, you make monthly payments to an insurance company (which typically remain fixed for the life of the policy) in exchange for coverage.

Which type of life insurance is best for those over fifty? It depends. Term life costs less than whole life, and is fine if you intend it to retire an expense, like a mortgage, that is expiring on a set date. Whole life, while it costs more, may be ideal if you have ongoing financial commitments. If your policy has a saving feature, you can build up your reserves.

Now or later? If you are relatively young, you may think you don’t need to purchase life insurance now, but both whole and term policies get more expensive once you turn fifty. You may not even be able to get term life insurance after age sixty, meaning you may be forced to buy a more expensive whole life policy.