Life insurance is something back can be a complex issue for some individuals. This differs from other types of insurance because it is providing security for those people who are dependent on your income; in the event that you are gone and can no longer provide for them. Many people wonder about the different guidelines when it comes to purchasing life insurance. Two of the biggest influencers when it comes to getting a policy at 50 or above are the amount of people who are financially depending on you, and the amount of fiscal responsibility you hold for each of these individuals.
Those persons who may be fiscally dependent on you might include children, siblings, and your spouse. When you have multiple people who look to you for financial support, you can name multiple beneficiaries to your life insurance policy. This allows for each dependent to receive a specific amount; while alleviating any confusion about the matter during a hardship. Adding numerous beneficiaries to your life insurance also saves the policy holder from needing to purchase more than one policy.
There are also cases where a person may not have anyone who is financially dependent on them. In these situations, the life insurance policy holder may still want to bequeath a financial sum to a specific person. An example of this may be a person that is over 50 who has children that are adults. Those children may not be financially dependent on their parents, but the parents may want to leave them money in the case of their passing.
In order to initiate the life insurance policy over the age of 50, the policyholder must begin the underwriting process. This involves a physical exam, and an extensive health screening. Individuals who are over 50 and in good health normally go through this process with no issues. Those who are over 50 and have health problems may have to pay a higher premium. A good example of this would be a policyholder who smokes cigarettes versus a policyholder who does not smoke at all.
Figuring out the appropriate amount of life insurance is a key factor in building your policy. The higher the policy, the more it will cost. Life insurance agents normally are paid on commission; and may provide incentives for you to purchase more life insurance than you need. For this reason, it is a good idea to seek out a financial advisor who is not paid on commission. By taking this approach, the life insurance policy you choose to purchase will align with your overall financial circumstance.
Term life insurance is similar to other insurances in the aspect that premiums are paid annually. There are no specific cash amounts correlating with a policy that is considered term insurance. These types of policies takes the paid premium and adds it to the account that will be paid to the beneficiaries. Whole life insurance differs because the premium that is paid covers the expenses of the life insurance policy as well as puts money in a separate savings account.
This savings account can be used for the policyholder later in life; or added to the amount that the policy’s beneficiary will receive. Both types of life insurance have specific guidelines, so your overall goals and needs will influence which type of policy you choose to purchase. No matter what your plans are for selecting a life insurance policy, it is recommended to seek proper guidance and don’t delay.