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The Surprising Benefits of Getting Life Insurance Later in Life

The Surprising Benefits of Getting Life Insurance Later in Life

| April 26, 2024

A common piece of standard life insurance advice is to get it as early as possible — and there are good reasons why. If you're young and in relatively good health, purchasing a term life insurance policy is usually much cheaper than it will be a decade or two later.

But while it can seem counterintuitive, there are actually several surprising benefits to getting life insurance later in life. Continue reading to learn more about what you can expect if you purchase life insurance in your 50s, 60s, or beyond.

Coverage for Final Expenses

Many people who buy life insurance in their 20s or 30s consider income replacement. If you have a spouse or minor children at home, it can be critical to leave enough in life insurance proceeds to help cover lost income or pay your children's college expenses.

But once your children leave the house, you no longer need an enormous life insurance policy. Instead, you may want to focus on covering more specific costs, like funeral expenses, medical bills, or the cost of settling your estate. This life insurance can help you plan (and pay for) exactly what you want without placing any financial burden on your loved ones.

Supplemental Retirement Income

Term life insurance covers a certain term of years and pays out only if you pass away during this period. But other types of life insurance, like whole life or permanent life insurance, will accumulate cash value over time. If you purchase these policies later in life, you can use this cash value as an extra source of retirement income—whether via a policy loan or a withdrawal.

Estate and Legacy Planning Tools

Life insurance can be crucial in estate planning, especially for people with significant assets or complex financial situations. This insurance can help cover any estate taxes and provide your heirs with liquidity, which can help ensure a smooth transfer of wealth to the next generation.

For those who want to leave their loved ones with a financial legacy, purchasing life insurance later in life lets you leave behind a tax-free investment or charitable gift.

Long-Term Care Benefits

Some permanent life insurance policies offer long-term care benefits or riders that can help cover the costs of assisted living or nursing home care. These policies may have more favorable terms than long-term care insurance policies, usually covering just a few years up to a maximum cap.

While purchasing life insurance at a younger age is generally more affordable, there are still a variety of valuable benefits to getting coverage later in life. Whether it's providing financial protection for loved ones, supplementing retirement income, or facilitating your estate planning goals, it's never too late to invest in life insurance.

Important Disclosures:

This material contains only general descriptions and is not a solicitation to sell any insurance product or security, nor is it intended as any financial advice. For information about specific insurance needs or situations, contact your insurance agent. This article is intended to assist in educating you about insurance generally and not to provide personal service. They may not take into account your personal characteristics such as budget, assets, risk tolerance, family situation or activities which may affect the type of insurance that would be right for you. In addition, state insurance laws and insurance underwriting rules may affect available coverage and its costs. Guarantees are based on the claims paying ability of the issuing company. If you need more information or would like personal advice you should consult an insurance professional. You may also visit your state’s insurance department for more information.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

This article was prepared by WriterAccess.

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