March 24, 2021

Do I Need Life Insurance After 50?

Read more about Life Insurance

Buying life insurance after 50 can be pricey. But there are some special scenarios that make life insurance well worth the cost for this age group.

Life insurance after 50 makes sense if:

  1. Your family still needs your financial support
  2. You're paying off debt that someone would be responsible for

In these cases, life insurance payments are a small price to pay for your family's stability. A payout could cover your mortgage and replace income (like a pension). Best of all, your family could maintain their quality of life.

Still, some people can get by just fine without a policy. Find out which lifestyle factors make life insurance optional, and who should get a policy sooner than later.

You Might Need Life Insurance After 50 If…

With life insurance, your loved ones receive a tax-free sum of money after you pass away. But who should get a policy?

You'll have dependents for a while (10+ years).
Are your kids in their teens or early 20s? They'll probably rely on your income as they settle into adulthood. That includes living at home or staying on your insurance.

A life insurance payout could replace the financial support they get from you. It's even more beneficial if you have dependents who need long-term care, like a special-needs or disabled child.

You're paying off debts that others would be liable for.
The good news: Your family probably won't be on the hook for your debts. But if you're married or have joint debt with someone, they may still be liable.

Keep in mind - consumer laws vary by state. Consulting an attorney is a smart idea.

In general, any co-signer, joint account holder, or spouse may be responsible for the debt you incurred together. A life insurance policy can pay those debts and save your partner the trouble.

You want to leave behind an inheritance.
There's a lot of financial pressure on older folks. You're saving up for retirement, but you're also expected to leave something behind for kids.

A life insurance payout could be your opportunity to pass on wealth and leave a legacy. This is a good option if you've had to dip into assets that you would have otherwise left to your loved ones.

How much is life insurance for a 50 year old?
A 50 year old can expect to pay $40-$60 per month for a 20-year term life policy. A whole life policy for someone of the same age and health status would cost upwards of $500 per month.

You Probably Don't Need Life Insurance After 50 If…

We won't lie to you: Life insurance is not a worthwhile expense for everyone. Here's how to know if you don't need it.

Your debts are paid, kids are grown and you have a healthy nest egg.
If you check all those boxes, there's not much else that would make life insurance worth the cost.

These days, it's rare that someone has all that taken care of by 50. If you have all that worked out, kudos! (And what's your secret?)

No one would be in financial trouble without you.
Don't worry: You'll certainly leave an empty spot in their hearts. But, if your family is financially stable and not liable for any outstanding debts, you're probably fine without a policy.

Many people buy a life insurance policy because they know their income would need to be replaced. If that's not the case for you, you're good.

What type of life insurance is best for a 50 year old?
If you want life insurance to cover estate taxes or other estate planning needs, whole life is the way to go. If you want a policy to pay off an outstanding mortgage or support any dependents who still rely on your income, consider a term life policy.

What Type of Life Insurance Should You Get?

There are two main types of life insurance: Term life insurance and whole life insurance.

With term life, your family only receives the payout if you die within a predetermined period of time (you decide how long that period is).

With whole life, your family gets the payout no matter when you pass away - it's in effect for as long as you keep paying the monthly premiums.

For the most affordable policy, term life is your best bet. It's less expensive than whole life because it only lasts for a limited period of time (5-35 years). The application process is usually easier and quicker, as well.

What happens if you outlive your term life insurance?
When your term ends, the policy expires and you are no longer covered. If you want to keep your coverage, most life insurance companies give you the option to renew your policy immediately, but you'll likely pay higher rates.

A whole life policy does offer lifelong coverage, but it costs up to 15x as much as a term life policy. But if you're wealthy and expect to leave behind a large estate, it may be worthwhile.

Bottom Line

Life insurance isn't just for young couples or new parents. After 50, a life insurance policy can still provide financial security, help you leave an inheritance for loved ones, or cover debts.

To get the best rates, be sure to manage your health as best you can and get quotes from multiple insurance companies. Try to get a policy sooner than later, but don't buy anything without doing ample research first.

Holly Zorbas is a guardian of content and community at CreditDonkey, a life insurance comparison and reviews website. Write to Holly Zorbas at holly.zorbas@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.

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