Life Insurance For People Over 50

People over 50 are most
at risk for bankruptcy.

According to a study conducted by bankruptcy trustees Hoyes, Michalos & Associates, those Canadians age 50 to 59 are the most at risk for bankruptcy. Their debts — including credit cards, personal loans and other forms not backed by assets — exceeded $84,000.

However, with rising debt loads, many Canadians over 50 still require substantial life insurance. Many of these people get trapped into taking mortgage insurance through various lending institutions. This is tragic because Mortgage Life Insurance provides questionable coverage under the best circumstances, but for people over 50, the coverages is especially limited.

Aside from the traditional drawbacks, such as the coverage decreasing as your mortgage decreases, the lack of portability, the beneficiary is the bank, there are no cash values and it is not convertible to a permanent plan. An additional drawback for seniors is that most mortgage insurance plans sold by banks end at 69. Banks also tend to charge much higher premiums for seniors than outside insurance companies. What happens if you still need coverage? Well, the short answer is you’re out of luck.

In contrast, individual life insurance policies for people over 50 offer numerous benefits when compared with a bank-owned mortgage insurance plan:

1. The coverage can be level or decreasing.

2. You own the policy and can choose your beneficiary. You also maintain the coverage if you switch homes, move to another bank, or sell your property.

3. Some companies, such as Empire Life, offer term plans that are renewable to age 100, but be warned — the renewal premiums increase substantially as you get older.

4. Permanent policies are also available to cover a mortgage. The insured can combine a permanent policy (where the premiums remain level for life) with a term policy. When the mortgage is paid-off, a small amount of permanent coverage can be maintained to cover any permanent need, such as final expenses, charitable bequests, or estate planning.

5. Certain permanent policies are available with an investment component. This investment can offset future premiums, help pay debt, or supplement retirement plans.

All in all, individual life insurance policies provide much more flexibility for people over 50 than traditional mortgage life insurance and coverage can be customized, so the insured is not left without when they most need the coverage.