What is the Best Life Insurance Over 50? – Cravitz Financial & Insurance Solutions

What is the Best Life Insurance Over 50?

Video Transcript:

Hey, how's it going everybody. It's Ryan here. Okay. So the question is what is the best life insurance policy for you to buy if you're over 50 years old? Now I'm going to tell you right off the bat, that it's not a one size fits all type of answer. It's definitely, it depends type of answer. And it depends on some various factors. And what I'm going to do in this video is I'm going to share with you three key points that you want to consider that will hopefully help you determine for yourself what really makes the most sense. And what's the best life insurance policy for you to go ahead and purchase.

So, first thing that you want to consider, and it's really just a question that you want to ask yourself and really, really understand the answer to, and that is why do you want to buy the life insurance policy? What do you want it to do for you? Who's going to be the beneficiary and what do they need the money for and such?

So let me give you an example of why this is so helpful. Let's say for instance, that you're 50 years old and you're planning to retire when you're 65 years old. And your concern is that if you were to pass away before your planned retirement date, that your spouse might be in a position where they would now suffer financially as a result, and you don't want that to happen. Well, if you're 50 and planning to retire at 65, that's 15 years from now, you may just want to get a 15 year term life insurance policy in that case. Another example would be, let's say you have a mortgage and you want to make sure that your mortgage is paid off when you pass away.

So depending on how long your mortgages and how many years you have left, you may want to make sure that you have a life insurance policy that's going to be in place until that the mortgage is fully paid off, or maybe you don't need a life insurance policy that's going to be there until it's fully paid off. You just need to have most of it paid off because you have other assets and such. So you need to understand what your overall financial situation is and what you're going to need or what your beneficiary would need. Another reason you may need or want life insurance. And this came up, actually again, it comes up quite often, especially because college is getting more and more expensive, but I had a guy telling me, he goes, "I need this life insurance, at least until my kids are out of school and I've got it paid."

So he wants to make sure he's able to pay for the college. And of course, college is getting, like I said, more and more expensive. We all know that, but he goes, "Once college is paid for, I can let the life insurance policies go. I'm going to be all set." So that could be another reason. Another reason, and this is something that would come into play in retirement is let's say you're married and you and your spouse are both collecting social security. Well, understand if you don't know already that when one of you passes away, you lose a social security check, you lose a smaller one of the two, but the smaller one does go away. So if that would be a problem financially for the other spouse, you may want to purchase a life insurance policy so they get the lump sum of money from the life insurance to kind of take the place of what they would have been receiving from that second social security check.

Same kind of idea could happen with a pension. Not many people have pensions anymore, but if you're one of the few fortunate people to have one, if you have a pension and if you pass away and you're married, let's say, how does your pension work? I mean, will it continue at the full amount? Will it continue at only half of that amount? Maybe your pension is for $6,000, but when you pass away, your spouse is only going to get $3,000, or will they get nothing? So how will that work? So you could buy a life insurance policy that could be in place when the pension stops or gets reduced, that can help out. Another reason that you may want to buy the life insurance policy is if you're concerned about being able to provide for your heirs and be able to pass money down to the next generation.

Life insurance can be a good way to do that because the proceeds do go to them, income tax free. So it's always nice to be able to save on taxes. Another reason to have the life insurance is you may be concerned about not just if you were to pass away, but what if you were to develop a chronic illness or need long-term care. There are certain types of life insurance policies today that allow you to access money from the death benefit while you're living to pay for those types of costs. So, as an example, and there's different types within this realm, but let's say you had a $500,000 life insurance policy, and you took out $100,000 to cover long-term care costs. During your lifetime, there could still be $400,000 left over that could go to the beneficiary. So it helps to create a pool of money whether you die or whether you need it for long-term care or chronic illnesses, depending upon the type of plan and such.

So there's a lot of different types of policies. And that's why I say it's always critical, number one, to understand what are your concerns, what are your needs financially? And then, that will help determine what is the best type of life insurance policy for you. If you're working with an independent agent that represents literally dozens of different insurance companies, it's just a matter of knowing what you need and then getting you the best policy to satisfy those needs at that time. So hope all that makes sense. Second thing that you really want to think about, or that you need to consider. And this is where the help of a trained professional, good life insurance agent can really help you, is to understand that all carriers will look at you differently depending upon your overall health, your medical history, and your lifestyle habits.

So as an example, maybe you smoke a cigar, some companies will offer you non-smoker ratings, even though you smoke cigars on a regular basis. Other companies will definitely give you a smoker rating. And smoker ratings are a lot higher than non-smoker ratings, for instance. Other companies are... Let's just say diabetes. Other companies are more favorable if you've had diabetes, or if you've had various heart problems, or if you have a family history that's not so good. Maybe a father who passed away early from a heart attack or whatever the case, and that's increasing your rates with one company, it may not increase the rates with another company. So they all have different underwriting guidelines and rules that they follow. So it's important to understand what is the best company to go to in order to get you the best pricing for the specific type of policy that you need.

So again, first step is why do you need it? And then, that determines the type of policy and such that you need. And that could be a term policy, a permanent policy, and there's all different types of policies within that. But then the next step is okay, once we know what we need, then it's getting the best pricing that we can based upon your overall health history and lifestyle habits and the company that's going to look at that most favorably. And the final thing that you want to consider is the application process. Now this varies greatly depending upon the insurance company, and it also depends upon the type of product that you're looking to apply for.

So for instance, for a very fast process, if you just need a small policy in place to cover funeral expenses and burial cost, things like that, you can generally find those for about $25,000. They'll cover you for up to $25,000. Some companies will cover you for a little bit more than that, but that's a fairly easy process. You answer some questions on an application. There's no medical exam, they don't obtain any medical records or anything like that. They will check your prescription drug report, but if you're approved, oftentimes you're approved the very same day. So that's a very easy process. But if you're looking for a larger type of life insurance policy, even $100,000, $250,000, $500,000, something like that, and let's say you're in your 50s for example, you're going to have a lot of different options on the type of application process you want to go with. So for instance, and it depends upon what your objective is or what's most important to you.

So let's say what's most important is getting the absolute lowest price that you can. Well, if that's the case, your application process is probably going to be longer. So the companies that will potentially give you the absolute best rates. And I say potentially, because it all depends upon a review of your application, an exam, or a nurse comes out to your house and does a blood drive, urine sample, asks you health questions, and such. They also could obtain your medical records, check your motor vehicle report, and your prescription drug history, those types of things. And oftentimes, that'll take anywhere from four to six to eight weeks, just depending mostly on how long it takes to obtain your medical records. And so, that's one option. Another option might be, well, maybe I don't need the absolute lowest rock bottom rates, but I want to get something maybe kind of close to that. There are some options what you can go with and possibly get those rates without having to do a medical exam.

Now, they'll still obtain your medical records and do all that. So it's still going to take a lot of the same time, anywhere from about four to eight weeks, but you won't have to deal with the medical exam. So it's just up to you. For a lot of people, it's a convenience thing. They don't want to have to get poked in the arm or make an appointment to go ahead and do that. They'd rather pay a few bucks more. It's completely up to you. And the third way that you could go and these policies are going to be even more expensive. But for the third category that I'm talking about here, these policies can be approved very, very quickly, usually within a few days to two weeks, just depending upon the insurance company that you're looking to apply with. So several different factors to consider. I do hope this was helpful. If you have questions on this or if I can help, please feel free to reach out. Take care, talk to you soon.


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