Life insurance can give you peace of mind at any age, but it’s not always necessary after age 60. To decide if you need life insurance, think about what your family needs, how much money you have, what debts you have, and what your long-term financial goals are.
If you’re regarding to turn 60, think about your life insurance. After all, if your kids have moved out and depend less on your income, they may no longer need your life insurance policy to care for them after you die.
If your savings for retirement, investments, and Social Security are enough to cover your funeral costs and the costs of those who still depend on your income, you might not require life insurance in your 60s. But there are times when it makes sense to have life insurance after 60.
Should You Get Life Insurance After 60?
You may not need life insurance after age 60, depending on your financial needs and resources. Still, people of any age can benefit from life insurance. Annuity.org says that more than half (57%) of Americans aged 65 and older have life insurance. Here are some reasons why you should keep life insurance following age 60.
You may also have to care for your children who still live at home or your elderly parents. Think about what your dependents will need in the future, like a wedding or college tuition.
Paying Off Debts
Do you still owe money on your mortgage, car loan, student loan, or credit card? When you die, your debts are settled with the money and property in your estate, which cuts into what your heirs get. Since the money from your life insurance goes to your heirs instead of your debts, it can help them financially.
If you are still working, insurance may substitute your income and any benefits from your job that will end when you die. The Insurance Information Institute says that employer-provided health insurance or matched 401(k) contributions can be worth $2,000 or more per month.
Do you already get Social Security with your spouse? People get benefits based on how much money they made before they retired. The spouse with the lower income before retirement gets an amount based on their earnings or equal to half of the other spouse’s advantage, whichever is higher.
The smaller retirement benefit stops when the spouse with the more significant benefit dies, which could lower the income of your other spouse. The difference can be made up by life insurance. Your dependents may get survivor’s benefits from Social Security, but how much and when they get them depends on many things. Life insurance can fill in the gaps.
Paying For End-of-life Expenses
It’s easy to spend more than $10,000 on a funeral. And there might still be bills from nursing homes and medical care after you die. The Lancet says medical care in the final year of life costs about $80,000 on average. Depending on the laws in your state and other factors, your family or estate may have to pay for medical bills that your insurance does not cover.
Building An Estate
Do you have a lot of money? Permanent life insurance may be a part of your estate plan. It can help you build cash value and leave money to your heirs that won’t be taxed.
Paying For Possible Medical Problems
Long-term care insurance gives care at home or in a nursing home if you can’t get dressed or take a bath alone. Long-term care is either built into some life insurance policies or can be added as a “rider.” Insurance riders also let you use your death benefit if you have a severe or terminal illness or disabilities and cover your premiums if you get sick and can’t work.
Do You Still Need Life Insurance After 60?
When Buying Life Insurance, You Should Think About The Following:
- Your expenses
- Your outstanding debts
- Your current financial responsibilities and monthly bills
- Your family’s financial needs in the future
- How much do you make now, and how much are your benefits worth
- Your liquid assets after taxes, such as retirement plans, funds, pensions, other life insurance policies, and Social Security benefits
You Can Determine How Much Life Insurance Is Required By Subtracting Your Assets From Your Costs.
Price Of Life Insurance After 60
Insurance rates go up as people get older. Policygenius says that a 35-year-old man is entitled to pay $20.90 monthly for coverage worth $500,000. A 65-year-old man, on the other hand, would pay $256.92, which is more than 12 times as much.
Women Usually Live Longer Than Men, So Their Life Insurance Rates Are Usually Less Than Men’s.
If you already have diabetes, high blood pressure, or a history of cancer, for example, you might get less coverage and have to pay more for it. In some situations, you may not get any coverage. Insurance companies can’t refuse to cover you because you have a disability, yet they can charge you more if they think your disability will cause health problems or shorten your life. Your family’s health history, like a history of heart disease, could also cause your premiums to be higher.
Your Insurance Coverage
It costs more to buy life insurance for $1 million than for $25,000. Get only the coverage you need to keep your premiums low.
Type Of Policy
Policies that can be renewed and policies that don’t require a medical exam cost more than standard policies. Permanent life insurance expenses more than term life insurance, and whole life insurance costs greater than universal life insurance within the permanent life insurance category. Add-ons to your insurance will also raise your costs.
Your Credit Score
In some states, insurance companies utilize your credit score to determine how much you should pay for insurance. If you have good credit, your premium might be less. Scores for insurance based on credit use the same information as regular credit scores. Before you apply for life insurance, check your credit history and score, and if you need to, take steps to enhance your credit.
Term Vs. Permanent Life Insurance In Your 60s
You Can Select From Two Major Types Of Life Insurance: Term And Permanent.
- Term life insurance lasts a set amount of time, usually between 10 and 30 years. During that time, the premiums stay the same. If you die while the policy is still in effect, your beneficiaries will get a death benefit. When the term is over, you can buy a new policy, renew the old one, or change it into a permanent one.
- Permanent life insurance is good for as long as you live, up to 99 years. As with term life insurance, you usually pay the same premiums for the rest of your life. On the other hand, permanent life insurance builds up a cash value that earns interest. As the cash value grows, you can take the money out, borrow against it, add it to the death benefit, or use it to pay your premiums. But if you don’t use the cash value before you die, the insurance company keeps it.
Permanent life insurance, which can cost up to 15 times as much as term life insurance, is harder to understand and costs much more. On the other hand, permanent life insurance might work for people with a lot of money who have used up all their other tax-advantaged investments.
Life insurance can give you peace of mind at any age, but it depends on your situation if you still need it after 60. Look at your debts, resources, and your family’s needs to decide if you need life insurance. You’ll be notified when your credit score changes in a way that could affect your family’s finances. This will give you even more peace of mind.