Getting Life Insurance Later In Life: Five Tips

Life insurance is a policy some people think it’s essential to take out. No rule book tells you when the right time is to take out life insurance, but most adults feel it’s around the time when they’re starting a family – although many people take out a policy well before that or long after. There are, however, a few rules of thumb to ensure you take out the best policy for your needs at that time and in the future.

Below, we’ll look at whether you need life insurance and five tips that should help you take out life insurance if you’re taking the plunge at a later stage in your life.

Do You Need Life Insurance?

Before we dive into the tips, it’s best to consider whether you actually need life insurance. As mentioned above, most people take out a life insurance policy if they’re considering starting a family or if they’ve recently started one. Having dependents, whether that’s children, a spouse, or even parents, is a clear reason to consider taking out life insurance.

The later in life, the more likely you are to have dependents. Even if you’re single and not looking to get married or start a family soon, you may have elderly parents that rely on your income for support. To decide if you need life insurance, consider the people around you and whether they depend on you financially. You can also talk to life insurance providers for advice.

Tip #1: Understand The Different Policies

Taking out the right life insurance policy for your needs takes time because there are so many policies to consider – it’s not as simple as homeowners or car insurance policies to understand. The various life insurance policies include

  • Term life insurance
  • Permanent life insurance
  • Funeral insurance
  • Joint life insurance
  • Mortgage life insurance
  • Group life insurance
  • Credit life insurance
  • Universal life insurance

One of the most popular and inclusive life insurance policies to take out is permanent life insurance, so we’ll focus on that one – but feel free to explore the other types of life insurance policies and how they vary. For example, funeral insurance covers only the cost of a funeral rather than financially supporting beneficiaries in the long term.

Permanent life insurance will cover your dependents financially for as long as the money lasts. Permanent life insurance is a policy that pays a death benefit – a lump sum deposited to the agreed dependents – and includes a cash value component that allows you to save money that you can access through the policy until death.

The cost of a permanent life insurance policy will depend on the agreed annual premium and the terms and conditions of the policy. Naturally, a policy with an agreed $5 million coverage will cost more than a policy that will cover up to $1 million. Plus, the agreed maximum payout will depend on your earnings and assets. The average Joe isn’t necessarily going to need cover for up to $5 million.

Tip#2: Compare Different Policies

Because there are too many different life insurance policies to focus on in this article, you must compare the various policies and find the best one for you. The list above is a great research starting point as it includes all of the life insurance policies you’ll find on comparison websites – comparison websites are the best place to explore the costs and terms and conditions of each life insurance policy.

Most policies will allow you to change the agreed terms and conditions or to cancel the policy entirely as years go on. That’ll come in handy if you take out a term life insurance policy and want to change it to a permanent one.

Tip #3: Reducing The Costs

Life insurance can become expensive depending on your income, outgoings, how many people depend on you, and your assets. The more an insurer has to pay to dependents should your life end, the more you’re likely to pay. Fear not – there are ways that you can reduce the costs slightly.

The first option is to consider joint insurance policies. You and your partner can create a joint account that experts say will take a chunk from your annual premium. This type of policy suits married couples who have been together for many years. The only issue with that type of policy is there’s only one payout – it has to be decided whether that payout comes after the first death or once both people on the policy pass away.

Other cost-reducing tips include living a healthier lifestyle – some life insurance providers penalize smokers – taking out minimal coverage, and switching life insurance providers to find a cheaper policy.

Tip #4: Pay Attention To The Fine Print

Looking at the fine print is essential when taking out any insurance policy. The fine print will tell you all of the clauses and terms and conditions that could impact payouts to your beneficiaries should you pass away. For example, some insurers won’t cover you for incidents that may cause death, like a risky hobby.

The fine print will also tell you how your dependents can access the money you’ve set aside for them through your policy. For example, some insurers will only pay out if a certain amount of time has passed between the time you took out the policy and the time of your death. Similarly, some insurers will stipulate when they payout after a death.

Tip #5: Be Truthful

Always be truthful when taking out a life insurance policy. Insurers will want to know your age, income, the number of people that depend on you, and your lifestyle. Insurers will take that information into account before agreeing to an annual premium. When it comes to paying out, providers will need to confirm all the details on the policy are the same as when it was originally acquired, and that’s the same for all types of insurance, from home to car.

Any discrepancies could lead to your dependents failing to access the money you’ve left for them.

Life insurance doesn’t have to be a minefield – and it shouldn’t be any more difficult the older you are. The tips above should help you navigate life insurance to find the right policy for you. There are tons of self-help articles online that go into detail about the specifics of the various life insurance policies.

 

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