Life Insurance – An Examination of Over 50's and Life Insurance

BY MELANIE WALTERS

As people pass fifty years of age, life insurance is commonly considered as an addition to their existing financial plan. This may be because they begin to realize a sense of mortality, but often it is because of more pressing reasons. One such cause could be the loss of a job or early retirement. Many people might have had life insurance through their job, only to find that now they lack the financial security that life insurance brings. Another reason may be the expiration of a term life insurance policy they may have purchased when they were younger. Whatever the motives, many of those who are of a mature age are beginning to consider life insurance.

Who Over 50 Qualifies for Life Insurance?

The fact is, basically anyone over 50 can qualify for life insurance today, some companies even guarantee it, but there are certain factors that will govern the cost of your policy. Of course age is a mitigating factor; someone 70 years old will pay higher premiums than someone who is 50, but some things favour older people. Let's take a look at some of the elements that govern life insurance cost and availability.

Good Credit and Life Insurance

Today's insurance companies generally do a credit check on their applicants, and though a poor credit rating won't disqualify you from obtaining life insurance, it may increase the cost of your premiums (monthly payments). Generally those who are above 50 have decent credit scores and a history of making sound and responsible financial decisions. Most have nearly or completely paid off their mortgages, have decent pension plans, savings, and other investments, and consequently are offered better rates.

Good Health and Life Insurance

A history of good health will also help someone to acquire a life insurance policy at better rates. Non smokers of course will fare much better than those who do smoke, and other factors such as family medical history, blood pressure and cholesterol levels are used to determine the cost. For those who do smoke, generally if they have quit for a minimum of six months before applying for life insurance, their premiums will be lower. Believe it or not, a person's driving record may also be taken into account. Drivers with no more than two moving violations within the previous three years, and those without any DUI or other reckless driving conditions in the previous five years will receive better rates.

Consider a Life Insurance Policy of Smaller Value

Another thing that can lower the cost of your life insurance policy is to consider the amount of coverage that you need. For older adults who are financially sound, a policy may be required only to cover funeral or burial costs. Younger people may require a policy that will cover the cost of thei children's education and continued standard of living, but generally only policies up to the value of $25,000 are guaranteed.

For greater coverage, extended medical examinations and higher premiums will be required. Because of the risk involved in life insurance, most providers are more apt to award policies of a smaller face value to those over 50.

Use Life Insurance to Increase Your Assets

Term life insurance – that which expires after a set period of time is more affordable than permanent life insurance – one which never expires. The benefit of permanent life insurance though is that it can be developed into another asset. Permanent policies usually provide a cash value in addition to a death benefit. This cash benefit can be withdrawn to cover the cost of emergencies, or borrowed against if that is preferred. In some cases the life insurance policy can be sold to a broker known as a life insurance settlement company, using the cash to meet their own needs while they are still living.

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