Term Life Insurance After 50: What You Need to Know

Are you approaching 50 and anxious to secure the financial future of your loved ones? Find out how term life insurance remains an option to consider that can help you do just that.

First of all, what’s the appeal of term life insurance?

Generally speaking, term life insurance is popular because it’s more affordable than permanent life insurance.

What makes it less expensive is the fact that the coverage term is determined in advance and generally expires while the insured is still alive. This means that since the insurance company rarely has to pay out the coverage amount stipulated in the contract, it can offer lower premiums for this type of insurance.

Conversely, a permanent life insurance policy has no predetermined term. Unless it is surrendered by the insured, the insurance amount must be paid in full by the insurance company upon death.

The low cost of term life insurance also makes it very popular with young adults just starting out in their careers and embarking on new stages in their lives, such as the purchase of a home or the birth of a child. In such cases, it can cover the mortgage balance for 20 or 30 years or protect the financial security of children until they are financially independent.

That being said, this type of insurance can be just as advantageous for people aged 50 and over and/or those approaching retirement.

5 good reasons to get term life insurance after 50

The fifties often coincide with the start of financial planning for retirement, the children leaving the nest and a more stable financial situation. If you’re in this age group, it may seem less important to get this type of life insurance.

But here are five 5 reasons that may convince you otherwise:

1. You haven’t paid off your mortgage yet

If you bought your home in your thirties, chances are you haven’t paid off your mortgage yet.

A life insurance policy with a shorter term (e.g., 10 years) could be a good option to cover your mortgage balance until the end of the payments in the event of death. This type of life insurance can in fact be more advantageous than bank mortgage insurance, where the insurance amount decreases as your mortgage balance decreases, unlike the coverage amount of a life insurance policy.

2. Your children are still financially dependent on you

In an economic climate marked by a significant hike in the cost of living in general and housing in particular, your adult children may still be relying on you for certain expenses. These might include the downpayment on their first home, or tuition fees for their post-secondary education.

In the event of your death, the amount of tax-free insurance paid to them could serve as a safety net, allowing them to carry on without the fear of running into financial difficulties.

3. You need a loan for a retirement project

Are you planning on buying a cottage, opening an inn or travelling around the world? Some ambitious retirement projects may involve taking out a loan. In that case, term coverage can be used to pay off the balance of that loan, so that it doesn’t become a financial burden for your loved ones in the event of your death.

4. Your group life insurance will end when you retire

If you’re planning to retire in a few years, you could lose your employer-provided life insurance. Term life insurance can be a great solution to add to your financial planning to ensure the financial security of your loved ones in the event of your death. The tax-free insurance amount can also help them meet your financial commitments and cover funeral costs.

5. You can convert your term coverage into permanent coverage without a medical exam

If your insurance needs ultimately exceed the coverage term you’ve chosen, you can always convert your term coverage into permanent life insurance without having to undergo an additional medical exam!

Talk to a financial security advisor

If you have any questions about term life insurance and whether it’s right for you, talk to a financial security advisor. They will be best qualified to analyze your situation and guide you toward the options that best meet your needs.

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