Many people take out term life insurance policies to cover them while they’re working, raising children, and paying off a mortgage. Those policies will often lapse by the time you’re in your 50s or 60s, and you may struggle to qualify for a new term life insurance policy, or face very high premiums for it.
At this point, some people take outover 50s life insurance. It’s a type of whole of life insurance, which means it will last for the rest of your life and provide a nearly guaranteed, fixed pay-out to your loved ones. Provided you’re under the maximum age, typically set at 80 or 85, acceptance is guaranteed.
Despite these advantages, over 50s life insurance policies are subject to a lot of debate. Detractors note that the payouts are small. If you live for a long time, you may end up paying more in premiums than your family receives.
Below we’ll cover some of the advantages and disadvantages of over 50s life insurance policies. We’ll also examine the circumstances in which it might make sense to take out an over 50s policy and whether other financial and insurance products might be more suitable for you.
Advantages of over 50s life insurance policies
Over 50s life insurance policies have several selling points:
Disadvantages of over 50s life insurance policies
But there are also some drawbacks to these policies:
When should you take out an over 50s life insurance policy?
Over 50s life insurance policies can be worth it, provided you want to leave a small amount of money behind, often earmarked for a specific purpose:
But if you want to provide for your family after your death, or if you expect to be very long-lived, over 50s life insurance may not be suitable.
Alternatives to over 50s life insurance
You might want to consider whether another financial or insurance product might meet you and your family’s needs better than an over 50s life insurance policy could:
