A common piece of standard life insurance advice is to get it as early as possible — and there are good reasons why. If you're young and in relatively good health, purchasing a term life insurance policy is usually much cheaper than it will be a decade or two later.
But while it can seem counterintuitive, there are actually several surprising benefits to getting life insurance later in life. Continue reading to learn more about what you can expect if you purchase life insurance in your 50s, 60s, or beyond.
Coverage for Final Expenses
Many people who buy life insurance in their 20s or 30s consider income replacement. If you have a spouse or minor children at home, it can be critical to leave enough in life insurance proceeds to help cover lost income or pay your children's college expenses.
But once your children leave the house, you no longer need an enormous life insurance policy. Instead, you may want to focus on covering more specific costs, like funeral expenses, medical bills, or the cost of settling your estate. This life insurance can help you plan (and pay for) exactly what you want without placing any financial burden on your loved ones.
Supplemental Retirement Income
Term life insurance covers a certain term of years and pays out only if you pass away during this period. But other types of life insurance, like whole life or permanent life insurance, will accumulate cash value over time. If you purchase these policies later in life, you can use this cash value as an extra source of retirement income—whether via a policy loan or a withdrawal.
Estate and Legacy Planning Tools
Life insurance can be crucial in estate planning, especially for people with significant assets or complex financial situations. This insurance can help cover any estate taxes and provide your heirs with liquidity, which can help ensure a smooth transfer of wealth to the next generation.
For those who want to leave their loved ones with a financial legacy, purchasing life insurance later in life lets you leave behind a tax-free investment or charitable gift.
Long-Term Care Benefits
Some permanent life insurance policies offer long-term care benefits or riders that can help cover the costs of assisted living or nursing home care. These policies may have more favorable terms than long-term care insurance policies, usually covering just a few years up to a maximum cap.
While purchasing life insurance at a younger age is generally more affordable, there are still a variety of valuable benefits to getting coverage later in life. Whether it's providing financial protection for loved ones, supplementing retirement income, or facilitating your estate planning goals, it's never too late to invest in life insurance.