Six reasons to have life insurance in your 50s.

Six reasons to have life insurance in your 50s.

Reaching your sixth decade can mean more financial freedom than you’ve had for a while. It’s possible your mortgage is gone – or close to it. And if you have kids, they may have moved out and started independent lives. So you might be asking yourself, ‘why have life insurance?’ The answer to this question depends on your circumstances and your appetite for risk, however having a financial security blanket of life insurance wrapped around you can be reassuring as you get older.

To find out what you may need, we recommend you talk to a financial adviser before making any decisions. Find a financial adviser.

To help answer the question ‘Why should I get life insurance in my 50s?’, here are some reasons to maintain or start your cover:

Reason #1: The chance of ill-health increases with age.

As people age, they become more susceptible to health problems*. So the older you get, the greater your chance of coming down with a serious condition. It’s the same with vehicles; the more kilometres on the clock, the higher the risk of parts wearing out and system malfunctions. Which is why getting a type of life insurance called Trauma cover could be a wise decision for someone in their 50s. 

Trauma cover pays a lump sum if the insured person is seriously injured or diagnosed with a condition set out in their policy. Cover varies between insurers, but conditions that are typically covered include cancer, loss of a limb, heart attack, deafness, blindness, Alzheimer’s, Parkinson’s and multiple sclerosis. With Fidelity Life you’re protected for more than 40 conditions. See the full list here

The money from a Trauma cover claim can help with household expenses, mortgage payments, medical treatment or anything else you might need. It’s your call how the claim money is used. 

 

Reason #2: You still have a mortgage or debts.

Some people in their 50s are mortgage free; others still have a home loan. If you’re still paying off a mortgage or another kind of loan, having some sort of life insurance could be a good move. If you die or aren’t able to work for an extended period, due to sickness or injury, a life insurance payout could help you or your family through a tricky financial time. It could help to cover loan repayments or repay debt entirely. It could also help with ongoing household expenses.

 

Reason #3: You don’t have a lot of savings.

It feels good to know you have savings to help out if your income suddenly goes away or reduces significantly. But many New Zealanders don’t have much of a cash stash to help them through after their sick leave runs out. Research shows that 47% of New Zealanders between 18 and 64 couldn’t survive more than a month without their income**. If that sounds like you, a type of life insurance called Income protection cover could be the backup plan you may need. With Fidelity Life, up to 75% of your gross monthly income can be covered.

 

Reason #4: You have dreams you want to fulfil.

It’s possible you’ve been paying off your home and tucking some savings away to achieve important life goals. Whether you plan to help your kids buy their first homes, pay for a family wedding, update your home, build an education fund for your grandkids or some other worthy ambition, protecting your dreams is important. Life insurance can help to ensure your cash reserves don’t get burned up because your income is disrupted due to sickness or injury for an extended time.

 

Reason #5: You still have dependents.

If your nest isn’t empty yet or you’re helping to support your parents, your income is still working hard to ensure family financial stability. But you’re getting older, so there’s an increased chance you may experience a long-term sickness that will take you out of the workforce for a while. Or maybe forever. How would your dependents cope without your financial input?

Having life insurance can help lighten financial concerns, because future possibilities will be less worrying. Depending on the cover you choose, your family can receive a monthly benefit or one-off lump sum if something happens to you.   

 

Reason #6: You want to protect your kids’ inheritance.

If you have children, it’s likely you’ll want to leave them a nest egg when you die. With Fidelity Life, you can choose to have age-rated life cover until the end. You just need to continue paying premiums. You can apply for cover at any time up to age 75, however earlier is better, as the cover you can get and the amount you’ll pay for it depends on a number of factors, including health status.

 

To plan for your life insurance future, talk to a financial adviser.

Why is life insurance important to have in mid-life? Getting advice from an independent financial adviser can help you to explore this question and make decisions about getting or keeping cover. A financial adviser can help you to analyse your current risk situation and consider the things that could happen in the future. Find a financial adviser.

 

DISCLAIMER: The information contained in this article is a summary of the key points of the insurance cover(s) mentioned and is general in nature. This article does not constitute a financial advice service. All covers are subject to the definitions, standard exclusions/limitations, terms and conditions contained in the full policy documentation which is available from Fidelity Life or your financial adviser who holds a Distribution Agreement with Fidelity Life. All applications for cover are subject to underwriting criteria.

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*euro.who.int - 'Risk factors of ill health among older people' 2022

**Mindthegap.co.nz - ‘How long could you survive without an income?’ 2015