Can You Get Life Insurance After You've Retired?
For some people, life insurance is a must-have financial product, particularly when they have a young family to look after. To others, life insurance may not have been a pressing need throughout their working life. It is only in later life that they begin to contemplate about having life insurance cover, which might lead you to wonder whether you qualify for it or not.
If you have already retired or are nearing your retirement and having thoughts about buying life insurance, this article will provide you with the information that you may need.
What Is Life Insurance?
Life insurance requires you to pay a fixed amount of money to your insurer as premiums on a monthly or annual basis. Upon your death, the insurance provider will pay out a fixed cash lump sum to your family and loved ones, or to your estate. This money can be utilised to support the surviving relatives, pay off a mortgage, cover their living expenses or to provide funds to a charitable organisation.
If you have people in your life who rely on you for their financial needs, then you may have to consider buying a life insurance policy to secure their financial future. In this case it may be prudent to take out 50,000 life insurance for seniors as a starting point, and then assess the level of premiums that you can afford to regularly pay out to increase the lump sum. Life insurance policies have been designed to provide either a fixed cash lump sum or a regular income to your loved ones, and it is up to you to decide what form of pay out you would like your family to receive after you die.
However, before you can buy a life insurance policy, you need to first figure out why you need life insurance, how much cover you need, what the term of the policy should be, and more importantly, whether you can afford to pay the monthly premiums or not. Failure to keep up with premiums can result in termination of the policy which can lead to loss of money.
You can begin by first working out how much you would like to leave behind to your beneficiaries. The bigger the legacy you wish to leave behind, the more you may need to pay as premiums. Also, it is a good idea to shop around and get multiple quotes after you have figured out the answers to the above questions.
Is There Life Insurance Specifically for Retirees?
It is possible to buy a life insurance policy at any stage in life. However, it is advisable to sign up for life insurance cover at an early age as it lowers the overall cost of the policy. The older you are, the greater the risk that the insurer associates with your application, and this usually results in higher premiums.
However, this shouldn’t discourage you from securing your future as some of these policies are excellent financial tools that have been specifically designed for older people. There are reliable online resource sites online like Final Expense Direct that help to guide you about what to look for and what to avoid in such policies, so visit their site to get some invaluable up-to-date information before you invest.
Types of Life Insurance
Primarily, there are two types of life insurance - whole-of-life insurance policies and term insurance policies. There are several types of life insurance policies such as family benefit policies and over 50s policies which have been specifically designed to cater to the needs of those individuals who have a peculiar set of life circumstances.
Term Insurance
Term insurance policies are available in several types such as:
Level Term Policies - Level term policies pay out a lump sum when the policyholder dies within the term of the policy. The amount that is paid as a pay out remains the same throughout the term. As a result, the amount that needs to be paid as premiums also remains the same. These policies are an excellent option if you wish to cover an interest-only mortgage or want to help your family in the event of your death.
Decreasing Term Life Insurance Policies - As the name suggests, the amount of cover provided by a decreasing term life insurance policy gradually decreases over the term of the policy. These policies are popular amongst those who have a debt to repay which also reduces with time, such as a mortgage. Alternatively, they can also be used for inheritance tax planning.
Life insurance experts Reassured have written this in-depth review of level term vs decreasing term cover.
Increasing Term Life Insurance Policies - Again, as the name suggests, the amount of cover provided by an increasing term life insurance policy increases over the term of the policy. As a result, the amount which is paid in premiums by the policyholder also increases in line with rising inflation and is reviewed on a periodic basis.
Family Income Benefit Policies
Family income benefit policies can be considered to be a type of decreasing term insurance policy. One way in which they differ from a decreasing term policy is that they have been designed to provide a regular income to your beneficiaries after your death until the policy comes to an end. However, you need to remember that if you buy a policy with a term of 25 years, but happen to pass away 24 years into the policy, then your family will receive benefits only for a year.
Whole of Life Insurance Policies
Policies which provide cover for as long as the policyholder is alive and pays out regardless of the age at which he or she dies are known as whole of life insurance. As a pay out is guaranteed, these insurance policies are significantly more expensive than term life insurance policies.
Over 50s Life Insurance
Generally, any person over the age of 50 who wishes to buy life insurance is automatically qualified for such a policy, sometimes even without a medical examination. It is suitable for those individuals who would like to leave behind a legacy to their loved ones after their death.
It is an assured way of providing for your loved ones, even if you have been suffering from poor health, or have had medical problems in the past. This policy is also taken out by those who would like to cover their funeral costs. Some insurers may also provide you with the option of refunding your premiums to your estate if you pass away within a certain period of time.
To know exactly how much life insurance may cost you in retirement, it is advisable to get in touch with an experienced life insurance provider.