Life insurance is designed to help protect those who will be financially affected by your death, and different types of policies can protect them in different ways. Depending on your situation and needs, there are many reasons to consider getting 50+ life insurance.
1. family Protection. People start families later and many people in their 50s still have children at home. Life insurance can help offset lost income, help protect your family from losing their home, help pay for your children’s college, and allow your spouse to take time off work to care for your family’s needs. family. At age 50 and older, term life insurance will generally be the most affordable option for obtaining the necessary death benefit to help ensure your family is well.
Reading: Why buy life insurance over 50
2. coverage of final expenses. These policies are specifically designed to cover costs related to funeral and death, but nothing more. They have a low benefit amount that can be affordable, even for people in their 60s and 70s, and usually don’t ask health questions or require a medical exam. Funeral costs often exceed $10,000, and there may also be final medical and/or hospice costs after you’re gone. A final expense policy can help ease these financial burdens on your family, but it won’t help replace the income of your financial dependents.
3. business protection. If you’re a business owner or partner, having a business continuity plan in place can be critical to ensuring your business is taken care of. Whole life insurance can help provide the capital needed to buy out a deceased owner’s interest and protect the business against the loss of a key person’s services, experience, and skills. life insurance can help address four main areas of business planning:
- the financing of buy-sell agreements and share rescue plans
- the financing of supplemental retirement programs
- key person compensation
- payment of loans and mortgages
- liquidity to help pay estate and inheritance taxes
- assets to help generate income for the surviving spouse and children
- equalization of assets between heirs
- funding for children with special needs
- income for life
- a legacy of charity
- possible capital gains tax evasion
- potential income tax deductions
4. pension substitution. If your pension ends when you die, getting life insurance coverage can help cover your spouse’s ongoing financial needs. however, term life insurance generally should not be used for this purpose because if you outlive the term of the policy, there is no protection for your spouse.
5. estate planning. By planning for the orderly transfer of property after your death, you can help minimize taxes and provide heirs in a way that reflects your wishes. permanent life (total or universal) can play a key role by offering:
Estate tax liabilities can erode a decedent’s assets. If there is no plan to pay these taxes (for example, by using life insurance proceeds), survivors could end up selling other assets, such as retirement investments or even precious family heirlooms to get the money. And unfortunately, when such assets are sold in this way, they are often well below market value.
6. a remaining charitable trust. If you’ve built a successful business or investment portfolio, there can be huge capital gains taxes when they’re sold for retirement income. At the same time, you may want to support charitable causes that reflect your interests. Whole life insurance can help you do this. With a charitable trust remaining, these two diverse needs can come together in one strategy that helps provide:
This can help make it possible to achieve your charitable goals while maintaining an important legacy for your heirs.
7. saving for retirement. As mentioned, whole life policies build tax-advantaged cash value, which can help pay for retirement. For someone nearing retirement, adding permanent life insurance to supplement their retirement can be a way to diversify their portfolio.