Commonly called final expense insurance, life insurance is a special kind of assurance designed to cover you and your expenses in the event of your death. It is a contract between an individual and an insurer or assurer. The assurer promises to pay a certain sum of money or benefits to a designated beneficiary upon the death of the policyholder. While the policyholder is alive, he or she is required to pay a premium; this can be a lump sum or a series of regular payments. Certain policies have separate benefits allotted for funeral expenses or survivors’ schooling. Over 50 life insurance is a specialized kind of insurance policy that those who are over fifty take out.
These are legally binding contracts that are set by the insurer and the policyholder. Many of these have different stipulations based on the cause of death, the policyholder, and the conditions surrounding the death. For example, the age of the policyholder often affects the cost of insurance. Also, certain situations like suicide, war, fraud, riot, or the execution of a crime are not covered by many policies.
Types of Policies
There are two basic types of life insurance policies. The first type of a policy is the protection policy, which usually pays a lump sum based on certain criteria. In the context of life insurance, a protection policy is one that pays a lump sum upon the death of the policyholder. The other kind of policy is an investment policy; these policies usually have regular premiums. They are typically called whole life policies, variable life policies, and universal life. Which type of over 50 life insurance policy is right for you is dependent on several different factors.
Term life assurance policies are those that only provide coverage for a specified amount of time. These policies do not accumulate any cash value. They are often thought of as pure insurance policies, because they only provide protection in the case of the death of the policyholder and nothing else. When choosing a term life policy, you should keep three things in mind: the face amount, the premium, and the term.
The face amount of a term insurance policy is the amount of money that is paid upon the death of the policyholder. The premium is pretty self-explanatory—it is the amount of money that you have to pay over the term of the insurance policy or the amount to be paid in the initial lump sum payment. The final is the term. Many people choose a term life policy when they do not want to be stuck with one policy for the rest of their lives. If a certain policy reaches its final phase, and the policyholders would like to renegotiate, then that’s possible.
For over 50 life insurance, the length of the term varies based on many different factors. An annual term policy is a policy lasting one year. The insurance company typically promises that it will offer an equal or lower amount policy at the end of the term in case the policyholder would like to renew.
A level premium term is one that can be purchased in five-year increments. These are called level, because the premium and the benefit remain the same throughout the course of the term. These are oftentimes attractive for over 50 life insurance policies, because they provide an amount of stability. Fifty is not very old and, if someone is low risk, he or she might want to secure a low-level premium with a high benefit while his or her health is still stable.
The other kind of insurance is mortgage life insurance, which is a loan that is secured by real estate or property. Usually, the premium remains level, but the policy declines in its face value. These types of policies decline in value, because the policy is insured according to the principal and the interest of the unpaid parts of the mortgage. The value of the interest against the mortgage is reduced every time the policyholder pays his or her mortgage. The policy holds a face amount that combines the principle and the outstanding mortgage interest.
Permanent life insurance is another popular kind of over 50 life insurance, because it cannot be canceled as long as the owner pays his or her premium. These policies are increasingly popular, since they increase in value up to the date on which they mature. They are popular for over 50 policies because, based on typical life expectancy, people pay for twenty or thirty years on a policy that is constantly accruing money. The policies are typically graduated based on the age and health of the policyholder. Over 50 life insurance for someone early in her fifties who exercises regularly and doesn’t smoke might be quite cheap and will gather money at a pretty quick rate. These types of policies are much more expensive for older people, because an older person is more likely to live long enough to pay until the policy matures.
These are also particularly attractive, since one can access the money in the insurance policy as cash; so, the policy also functions as a bank account.
Whole life coverage for over 50 life insurance tends to provide lifetime benefits at a level of premium and benefits. These are very popular as over 50 life insurance options, because the premium remains level regardless of age. For those younger than 50, term insurance policies are very popular, because they tend to rise with the age of the policyholder, meaning that they are very cheap when a person is young. They also differ based on the health of the policyholder. So, if the person taking out an over 50 life insurance policy already has a preexisting condition, he or she might be paying quite a high term insurance rate, but it will be much more stable as a whole life coverage.
There are dozens of different insurance policies, and which type is right for your over 50 life insurance policy is a personal decision. You should make the decision based on your own finances, your current health, and your needs.