Nearing 50 Life Insurance

Coriel-11

Hi, I turn 50 in a few months, so I'm wondering if I should get a new Life Insurance policy before the big day. I have around 4-5 years left on my current Life Insurance policy (25 year term) and about 16 years left on my mortgage.

Do you think it's worth starting a new one now so I get lower rates before I turn 50, or wait until the current one expires, so I don't double pay for the next 4-5 years. And should I just get to the end of the mortgage term (by when my kids will be in their 30s) or take out until I'm due to retire?

I'd be grateful for any advice. Thanks

DullGreyGuy

There are plenty of online tools to be able to do Life quotes online, you could do 3 dummy quotes using fictitious details where you adjust the dob such that one is nearly 50, one is just 50 and the third is 54. In principle it should give you an idea of the spread based on age alone. Obviously insurer's views on mortality risk change frequently so it won't guarantee what the rates will be if you decide to wait. 

The general idea of life insurance is to provide for those that are financial dependent on you if you're not here to do so yourself. When that will end varies notably depending on personal circumstances, family, your thoughts about life after death etc. 

As you near retirement a Death In Service, if you have one, may become sufficient on its own, for others it won't be and some think its sufficient whilst they're in their 30s 

Obviously if you do decide to delay then you are running morbidity risk, ie the risk you develop a significant new illness in the next 4 years meaning that premiums skyrocket or you cannot get terms. 

Coriel-11

DullGreyGuy said:

There are plenty of online tools to be able to do Life quotes online, you could do 3 dummy quotes using fictitious details where you adjust the dob such that one is nearly 50, one is just 50 and the third is 54. In principle it should give you an idea of the spread based on age alone. Obviously insurer's views on mortality risk change frequently so it won't guarantee what the rates will be if you decide to wait. 

The general idea of life insurance is to provide for those that are financial dependent on you if you're not here to do so yourself. When that will end varies notably depending on personal circumstances, family, your thoughts about life after death etc. 

As you near retirement a Death In Service, if you have one, may become sufficient on its own, for others it won't be and some think its sufficient whilst they're in their 30s 

Obviously if you do decide to delay then you are running morbidity risk, ie the risk you develop a significant new illness in the next 4 years meaning that premiums skyrocket or you cannot get terms. 

Thanks that's really useful advice. I hadn't thought about the possibility of a new condition changing things in the next few years.
Coriel-11

dunstonh

Hi, I turn 50 in a few months, so I'm wondering if I should get a new Life Insurance policy before the big day. I have around 4-5 years left on my current Life Insurance policy (25 year term) and about 16 years left on my mortgage.

There isn't a big jump at 50.   From around age 34 onwards, the cost of starting a life assurance increases annually.   You will be more expensive at 50 than 49 but not by much.   Some providers will not go by your birthday but change by the month, e.g. 59 and 10 months.

Do you think it's worth starting a new one now so I get lower rates before I turn 50, or wait until the current one expires, so I don't double pay for the next 4-5 years. And should I just get to the end of the mortgage term (by when my kids will be in their 30s) or take out until I'm due to retire?

You are looking at different needs.
1) mortgage/debt coverage
2) family provision

Both of these needs will expire at different points.  So, one policy with a single sum assured is unlikely to be best.   A multi-segment plan (i.e. each need covered separately within a single plan) would likely work out more cost efficient.

Don't forget your pension provision in respect of death.    A spouse may need life assurance on you if your provision is not great at the moment or would be reduced if you die before retirement.   Equally, if you have good provision on the pension, you may not need as much life assurance.

Coriel-11

dunstonh said:

Hi, I turn 50 in a few months, so I'm wondering if I should get a new Life Insurance policy before the big day. I have around 4-5 years left on my current Life Insurance policy (25 year term) and about 16 years left on my mortgage.

There isn't a big jump at 50.   From around age 34 onwards, the cost of starting a life assurance increases annually.   You will be more expensive at 50 than 49 but not by much.   Some providers will not go by your birthday but change by the month, e.g. 59 and 10 months.

Do you think it's worth starting a new one now so I get lower rates before I turn 50, or wait until the current one expires, so I don't double pay for the next 4-5 years. And should I just get to the end of the mortgage term (by when my kids will be in their 30s) or take out until I'm due to retire?

You are looking at different needs.
1) mortgage/debt coverage
2) family provision

Both of these needs will expire at different points.  So, one policy with a single sum assured is unlikely to be best.   A multi-segment plan (i.e. each need covered separately within a single plan) would likely work out more cost efficient.

Don't forget your pension provision in respect of death.    A spouse may need life assurance on you if your provision is not great at the moment or would be reduced if you die before retirement.   Equally, if you have good provision on the pension, you may not need as much life assurance.

Thank you that's really useful.