Do Baby Boomers Still Need Life Insurance?

Universal Life Insurance Company (Photo credit: Thomas Hawk)

All through our lives we have had many different types of insurance. Whether it was car insurance, home insurance, or life insurance we know to protect ourselves and our families, it was a necessary expense. But in retirement is it still necessary to have life insurance? The kids are on their own and are self sufficient. We have less to protect and don't view the need for life insurance anymore.

Maybe you think life insurance for people over 50 isn't important. Think again. While people under fifty often get life insurance for financial protection for their spouse and children, people over 50 have even more ways to use life insurance.

If you have a spouse who will survive you, there is a need for some financial security for the rest of their life. Other needs for life insurance can be:

1. Taking care of your adult special needs child.
2. Paying off your mortgage and your debt.
3. Pension Maximization Strategy- letting you take the maximum dollars in retirement benefits.
4. Providing for your estate taxes.
5. Providing financially for your family business. 
6. Final expenses.
7. Charitable giving.
8. Providing for children or grandchildren for college and/or professional school.

I'm sure we've missed one or more reasons for life insurance in your senior years.  Whatever your reasons for needing life insurance are, the process is still the same. 

What keeps most Boomers from getting life insurance?

The answer for most people is cost. Seeing that large monthly payment makes people not purchase the insurance. But by doing that, everyday your making it worse. The price you will pay for your monthly premium on a 20 year term policy dramatically increases as you go from 50 to 60 and from 60 to 65.

Men have it worse when paying for life insurance. Women live longer than men so their insurance costs are less. Also as we age we have more health issues which will increase the premium we need to pay. Here are two examples of life insurance rates, compared for men and women. 

Female, Preferred risk,  $250,000 of insurance for 20 years, level face amount and premium

• Age 50 is $39 per month
• Age 60 is $94 per month
• Age 65 is $167 per month

Male, Preferred risk,  $250,000 of insurance for 20 years, level face amount and premium

• Age 50 is $50 per month
• Age 60 is $129 per month
• Age 65 is $258 per month

It pays to apply for your life insurance as early as possible so you can lock in low rates.

How much life insurance do you really need?

When shopping for life insurance deciding the amount of coverage depends on many factors. The insurance should only be as much as needed to fulfill a specific need. Support for the surviving spouse must be measured with the state of savings, pension, and other income. You may only need to just provide enough money to pay off a mortgage and provide burial expenses. 

Life happens and the best time to buy life insurance is today when your healthy and at your youngest. It will be at the most affordable price and only be more expensive if you wait.