Reader’s Question:

My mom and dad just turned 50 and I’m wondering how much it would cost me to buy term life insurance for them. Do they need to get one at this time of their lives? My sister and I both have stable jobs. I have a family of my own, and both of us are covered in our own term life insurance.

Darwin

Brooklyn, New York

Your parents may already be thinking about retirement and rest at this point in their lives. Their financial needs have changed as their children have grown independent. Life insurance is meant to cover financial income to secure the future of dependents if something unexpected happened to the insured. But at the age of 50, with no dependents and income to replace, why should someone still consider getting life insurance?

Despite age, buying life insurance for seniors still seems to be a worthwhile investment. If your parents have no savings to cover funeral/ burial costs should they die, expenses will rest on you and your sister. All outstanding debts on loans and mortgages at the time of their death could still be taken out of their estate and could be passed on to loved ones if they don’t have enough savings or any life insurance to cover those debts. You don’t want to carry these extra expenses while starting your own family. This could only compromise your financial obligation to your own family.

Cheap term life insurance for seniors

When buying life insurance for seniors, senior term life insurance seems to be the most recommended by insurance agents. Its term life insurance rates are lower because of the specified limit in years, such as 10, 15 and 20 years. At 50, most insurance companies won’t insure anyone for longer than 20 years. Ask your parents if they still have some financial obligations that they could leave behind in case anything happens to them. From there, you will be able to calculate the amount of life insurance they need. For seniors with no dependents and no financial obligations, $50,000 is usually enough to cover funeral costs. Buying life insurance for seniors is certainly not a pleasant task, but it is something you need to do now to avoid regrets when something unexpected happens.

Tips for getting cheap term life insurance

1. Be healthy – if you can loose some weight rather quickly then do so before you apply and go through a medical exam. Stop smoking and drinking alcohol at least 4 months prior to getting your physical exam to make sure your blood test will be as clean as possible.

2. Know your coverage options – the longer the term coverage in years the better the annual premium will be.  Meaning, you will pay more per year for a 10 year term than you will for a 20 year term when adjusted for inflation.  The longer out you can lock in your rates the better you will be in the long term  Rule of thumb is to buy as much dollar coverage as you can afford now, with the longest time frame available.

3. Keep shopping around – don’t just assume that your first or even your second term life insurance quote is going to be the same for the many other companies out there.  You will be surprised how varied the rates will be after you have compared 10 or so companies.  Keep shopping!