Last updated: Aug 29, 2023

Why you're never too old for life insurance

Michael Harms AFPS
Director & Chartered Financial Planner at Mortgages for Doctors

Why you're never too old for life insurance

When it comes to life insurance, many people tend to assume that it's only necessary for those who are young and just starting out in life.

However, the reality is that life insurance is important at any age, and no one is ever too old to consider getting coverage. In fact, there are several reasons why getting life insurance later in life can be a smart and responsible choice.

First and foremost, life insurance provides financial protection for your loved ones in the event of your passing. While it's true that older people may have already built up a substantial amount of savings and assets, the reality is that there are still likely to be outstanding expenses that will need to be taken care of after you’ve gone.

This could include things such as funeral costs, outstanding debts, and other expenses that your loved ones may not be able to cover on their own. With life insurance, however, these costs can all be met, ensuring that your loved ones aren't left with a financial burden during an already difficult time.

Another reason why life insurance is important at any age is that it can help with estate planning. As people get older, they may begin to think more seriously about how their assets will be distributed after they pass away. Life insurance can play an important role in this process, as it can be used to provide an inheritance for loved ones, or to help cover estate taxes and other expenses that may arise.

Additionally, life insurance can also be a valuable tool for business owners. If an older individual owns a business, life insurance can be used to help ensure that it continues to run smoothly after they're gone. This could include providing funds to hire a replacement, pay off outstanding debts, or even fund a buyout of the business.

The cost

Of course, it's important to keep in mind that life insurance can be more expensive for older people. This is because the risk of passing away increases as we age, and insurance companies need to take that into account when setting premiums. However, even with higher premiums, life insurance can still be a smart investment, especially if you have loved ones who depend on you financially.

There are also several different types of life insurance policies available, which means that older people have a range of options to choose from depending on their needs and budget.

For example, ‘term’ life insurance policies provide coverage for a set period of time - usually between 10 and 30 years. These policies are typically less expensive than ‘whole of life’ insurance policies, making them a good option for older people who may not need coverage for the rest of their lives.

Whole of life insurance policies, on the other hand, guarantee your family gets a payout when you die. These policies can be more expensive, but they also come with a range of benefits, such as the ability to build up cash value over time.

Ultimately, the decision to get life insurance is a personal one that should be based on your unique circumstances and needs. However, for older people who have loved ones who depend on them financially, getting life insurance can be a smart and responsible choice. With the right policy in place, they can have peace of mind knowing that their loved ones will be taken care of after they're gone.

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