The Importance Of Having Life Insurance In Your 50s (And Up)

By this point, you are closer to retirement, and you can kick back and enjoy everything you have worked hard for these past few decades. However, when it comes to financial planning for your 50s (and up), does life insurance have a place?

In this article, we will look at why someone aged 50 and up might or might not need life insurance and explore some options if you are considering it for the first time.

Why people 50 and older should have life insurance

Life has unexpected twists and turns, many of which were not adequately prepared for. Our Financial Legacy Index found that many Americans have not taken critical steps toward protecting their family’s financial future if the unexpected happens. 52% of Americans say they often worry about the financial situation they will leave behind for their children/future children after they pass away. Life insurance, at its core, is meant to alleviate financial concerns and protect those who are vulnerable in the event of your death.

If you’re over 50 years old and find yourself without life insurance, it is likely for one of a few reasons. You could have had a term life insurance policy that expired, coverage through an employer that expired once you left your job or retired, or you’ve never had life insurance coverage in the first place.

Regardless of which situation applies to you, life insurance in your 50s is worth considering either for the first time, or again. When weighing the options, ask yourself, “Does someone rely on me or my income for their wellbeing?” If the answer is yes, you likely need life insurance.

Here are some additional reasons you may need life insurance if you are 50 years old or older:

• You have financially dependent children or grandchildren
• You are paying off debts, like a mortgage or credit card balance
• You are worried about covering your final expenses
• You want assistance with estate or legacy planning
• You want to supplement your retirement income with the cash value component of a permanent life insurance policy
• You want to protect your existing assets

According to our Financial Legacy Index, one third (33%) of Americans say their family would be left financially unstable or bankrupt in the event of their passing. Even if it has never been a consideration until now, it’s never too late to secure your financial future. Your 50s might be the perfect time to explore life insurance options for you and your family.

Why you might not need life insurance if you are 50 or older

Life insurance also might not be necessary for some people in this age bracket. Depending on your circumstances, life insurance could be unnecessary at this stage of your life.

Here are some reasons why you may not need life insurance:

• You are financially secure enough to retire comfortably and take care of final expenses
• Your children are grown up and financially independent
• If you have finished paying off significant expenses—like a mortgage, child’s college expenses, etc.—and have a comfortable nest egg

If this sounds like you, life insurance may not be necessary. Your life insurance rates are higher at this age, and you may have other financial assets such as property, investments, and savings, which can be used in its place.

Best types of life insurance for people 50 and older

If you are now considering life insurance in this phase of your life, you have two reliable options:term life insurance and permanent life insurance. Let’s explore the benefits of each.

Term life insurance is a good fit for people who are looking for coverage for a set period. For example, you may feel that you need coverage until your kids are finished with school, or until your mortgage is paid off. Put simply—term life insurance is the most accessible and most affordable option. It provides coverage for a set period or “term” (typically 10–30 years) and is designed to protect your dependents during that term. If you pass away during the term period, your beneficiaries receive a cash payment referred to as the “death benefit” that can be used to cover expenses or income loss related to your passing.

Permanent life insurance is a good option for people who want the security of lifelong coverage (as long as payments are made). Permanent life insurance can be helpful with final expenses and legacy planning, and the cash value component can be beneficial to retirees. However, due to the cash value component and the coverage duration, permanent life insurance policies are more expensive than term. Therefore, it is essential to ensure the premiums are within your current and future budget.

Ethos offers a guaranteed-issue whole life insurance policy that is another worthy option to consider. The policy guarantees coverage to all applicants between 65–85 and is a good fit for people looking for help with their final expenses. Learn more about Ethos’ whole life insurance policy, and whether it may be a fit for you here.

The bottom line on life insurance in your 50s—and beyond

Life insurance can be a valuable financial tool for people 50 and older. Even though life insurance later in life is more costly, it can be well worth the cost for those who need it. Now is still the best time to get life insurance, primarily if people rely on you and your income. Ethos makes life insurance more straightforward and affordable than you think—get started today by getting a personalized quote.