Just because you’re getting closer to retirement doesn’t mean that there aren’t good opportunities to get the coverage you need from a reputable provider. Here are seven life insurance options to explore if you’re age 50 or older.
1. Term life insurance
Generally, term life insurance allows you to buy the most amount of coverage for the lowest cost. Applicants can choose the term (i.e., number of years) that they would like to have coverage before the contract expires. This allows somebody in their 50s to easily buy a policy that lasts anywhere from 5 to 30 years.
Term life insurance is a simple policy because your premiums go directly toward paying for the death benefit. However, applicants do need to pass a health questionnaire and medical screening before the contract can go into effect. Depending on these results, your premiums may vary, or the insurance company could potentially deny your application.
2. Whole life insurance
A whole life policy is one of the most common forms of a broader category called permanent life insurance. Permanent life insurance provides coverage throughout your lifetime (regardless of any health changes) as long as your premiums are paid up to date. Additionally, whole life policies come with a cash value savings component.
Because of the length of the coverage and contributions to the cash value, a whole life policy will typically be more expensive than term life insurance. Applicants are also subject to the same health questionnaire and medical screening as term life insurance.
3. Variable universal life insurance
Variable universal life insurance is another type of permanent life policy that lasts your entire life and has cash value. However, unlike whole life policies, the death benefit can be adjusted so that the premiums are more affordable. Also, the cash value component can be invested in the stock market funds (similar to your retirement accounts).
4. Indexed universal life insurance
Indexed universal life insurance is another variation of permanent life insurance. It offers policyholders the same flexibility to adjust their death benefits and reduce the premiums. However, the policy’s cash value is invested in an index fund with upper and lower limits. This makes it impossible for you to lose value if the stock market declines.
5. Simplified issue life insurance
If you’re not in the best health or would prefer not to undergo a medical exam, then another product to consider is simplified issue life insurance. This is part of what’s dubbed “no medical exam life insurance” because applicants only need to pass a health questionnaire but not a physical medical exam.
While this type of product can be helpful to someone with health challenges, it should be noted that these types of policies will be much more expensive than term and many permanent life policies. Plus, the maximum allowable coverage will also be lower.
6. Guaranteed issue life insurance
Guaranteed issue life insurance is a policy that does not require a medical exam or a health questionnaire. An applicant only needs to pay the premium in order to receive coverage. Similar to simplified life insurance, these types of policies will generally be more expensive and provide a limited death benefit.
7. Final expense life insurance
Final expense life insurance is for people who want just enough death benefits to cover the cost of a funeral. This is another type of no medical exam life insurance. However, since the death benefit is substantially lower, this policy is often more affordable than simplified or guaranteed issue life insurance.
The bottom line
People who are aged 50 or older have several life insurance options to consider. They can buy traditional term or permanent style policies as long as they pass the medical screening. If not, they can also consider no medical exam options such as simplified issue, guaranteed issue, and final expense life insurance.