Most people take out life insurance not at over 50 but at the start of the parenting journey. They time it to end when their children are young adults.
They think their financial obligations will be over by the time the children have left the nest. But life patterns are changing.
More people are starting their families later in life.
The Office for National Statistics (ONS) shows that younger women are now delaying having children. More are choosing to prioritise their careers first.
The ONS says that women in their 40s are now the only age group in the UK with a rising pregnancy rate. There were 28,744 conceptions to women in their 40s in 2016 – a huge leap from the 12,032 in 1990.
This is one factor affecting people’s considerations about life insurance over 50. But there is another. Our parents are living longer and requiring more care in their older years.
Life insurance is an insurance policy you take out to deliver a lump sum when you die. This is either to clear debts, or to provide money for your dependents to live off.
Life insurance is not about you. It’s about the people who depend upon you.
So the Two Questions to Ask Yourself if You’re Considering Life Insurance over 50 are these:
- Do or will you need to provide for someone else?
- If you are no longer here, how will you that?
4 Reasons to Consider Life Insurance over 50
 Give your children the support they might need
You may have had your children late or they may already have flown the nest. In either scenario, it could be some years before they can stand on their own feet.
Students in England now graduate with eye-watering average debts of £50,800. Young people now also struggle to get on to the housing ladder. Most are 30 or older before they manage to buy their first home and need to have saved a deposit of £20,622.
A life insurance over 50 policy could give you the security of knowing this. Even if you die suddenly, your children will have financial support for years after you’ve gone.
 Make sure your partner is comfortable
Not all of us manage to pay off our mortgages by the time we reach 50. If this is your situation, life insurance is worth considering. The right policy would give you the peace of mind.
Any loans or outstanding debts you have can be repaid in full if you or your partner died suddenly.
 Meet your retirement savings goals
If you’re working and saving towards your retirement pension now, you’ll have planned to have a decent standard of living after you stop working. But if you’re the main wage earner, and you die unexpectedly, your widow or widower may have a diminished pension savings pot.
Life insurance can be a way to fill this gap and help them have the retirement you both planned for.
 Care for elderly parents
As we’re all living longer, more people in the over 50s group are caring for their elderly parents. Social care isn’t free and depending on your parents’ situation, all or some of their care needs to be paid for.
“The number of people in care in the UK will almost double by 2035. Our research shows that an over-reliance on relatives and the state could put families in serious financial difficulty,” says Jane Curtis, Chair of the Centre for the Modern Family.
Having a life insurance policy if you’ve elderly parents means you can contribute to their essential care even if they outlive you.
There are basically three types of life insurance.
- Level term life insurance, which will pays out a fixed amount if you die during the term’s time.
- Mortgage decreasing-term life insurance, which is a specific product bought to clear your mortgage. It is called decreasing because as your mortgage debt reduces with time, the amount paid out drops accordingly.
- Whole of life insurance, which is a policy used to protect your children against your inheritance tax costs. When you die, inheritance tax is charged at 40% on all your assets worth more than £325,000. With a whole of life policy written ‘under trust’, your beneficiaries will receive a cash-free lump sum they can use towards the tax bill.
Finally, here are two pieces of important advice if you’re looking at life insurance over 50.
Do write it in trust to protect your dependents from tax, and to possibly allow them quicker and easier access to the financial benefits.
Do take independent advice. Life insurance is a complex and getting it right is important. A small commission is well worth paying for.