Insurance, of any variety, is a product you purchase hoping to never use. In terms of medical, car, or life insurance, you don’t want to have to implement your policy’s benefits because doing so means something has happened that merits a payout. This could include the diagnosis of a medical condition, a car wreck, or the death of a loved one. However, while you don’t want to have to use insurance, it is something you must think about. Furthermore, the way you evaluate the types of insurance you need will vary based on many factors including your age. For example, the type of insurance you need at age 21 will differ greatly from the coverage you need at age 56. Below, you will find applicable information you should know about insurance as you age:
While we mentioned car and medical insurance in the opening, today, we are going to focus primarily on life insurance. After all, most states require car insurance coverage and if you are retired, you can likely utilize Medicare for health or medical insurance, so our focus will be on an “optional” insurance— life insurance. Life insurance is insurance coverage that pays out to those you leave behind when you pass away.
How to Know if You Need Life Insurance
There are some cases where life insurance is unnecessary. For example, if your final expenses have already been paid, and you have healthy savings and/or adequate investments, then life insurance is likely not needed. However, if any of the following factors are true, you might want to consider it:
- You have a high net worth and are worried about those who obtain your assets having to pay estate taxes. You might consider a policy to help offset this cost.
- You have not paid for funeral expenses. Did you know that funeral expenses run on average anywhere from $7,000 to $12,000? If you haven’t paid ahead and taken care of these expenses, you are leaving your spouse and/or children to foot the bill, which can be quite a financial burden. Life insurance provides a way to cover these expenses without placing an undue burden on those you love.
- You want to provide an inheritance but have no investments or valuable estate. In many cases, you might choose to invest in a life insurance policy for those you love who are left behind.
- You need to support your children, spouse, or others who are currently dependent on your income. If you are still making an income and are actively supporting dependents, you need to consider what would happen to them if you passed away. Could they get by without your income or financial contribution? A life insurance policy can be a way to provide for them even after you are gone.
- You have outstanding debt and don’t want to burden those you leave behind. If you currently have debt that is unpaid, a life insurance policy can provide a means for those you leave behind to pay off said debt and keep your assets. If you don’t provide life insurance or investments for them to do so, they will likely have to sell any assets you have to pay off what you owe.
Best Life Insurance Option for Seniors
If you determine you are a good candidate for life insurance, you need to consider the types of life insurance you could purchase. In most cases, term life insurance policies are a low-cost, applicable option if you are in good health overall. If you are in your 60s or 70s, you can likely purchase a 10-to-20 year term policy. However, once you reach the age of 80, you will probably have difficulty finding term life coverage.
Obviously, life insurance isn’t a pleasant topic. No one wants to think about passing away. However, providing for those who you leave behind is a noble act and a great last testament to the love you have for your family.