Life insurance options at age 50, need options.

I finally opened the weekend's mail after the challenge Tuesday, and found this bit of good news:

Seems at age 50 I jump from $251 to $411.  Not a small increase...  I've had the same Veterans Group Life Insurance since I got out of the Navy in '91.  It's gone up a bit each year but never a 65+% jump.  Time to check some options.

I tried AARP (which I just joined recently to get the eye glass discount but ended up better with insurance) and that was $74/month, even worse.  Someone recommended AFBA which I had never heard of and they were also about the same.  USAA was $49/month for 25 years, I need to look into this "25 year" thing, because it affected the rate.

Anyone have options/opinions/ideas?

Buy term life insurance. It's much cheaper than whole life, and not a total ripoff.

Buy it for 20, 30 years. Your premium is locked in for the life of the term and it won't go up as you age.

I sat down with my insurance agent and let him walk me through the discussions of how much coverage I needed, what companies were compatible with my lifestyle (do they consider driving a track day or autocross to be in the same bucket as "race car driver"?), and then found an outfit with term coverage at a good rate.  The way he explained it to me is that the term insurance was basically supposed to protect my wife and kids until the kids were grown and we had enough in retirement that my wife could live off that.

Do you really need life insurance, or is it just an unnecessary expense that you've just become accustomed to?

I've never had life insurance and never will. I don't see the purpose, but I work with people who are in good financial shape who have up to a million dollars in life insurance that they don't need - and the hefty premiums that go with it.

In reply to Zomby Woof :

Honestly.....probably not.  Not married, no kids, no significant assets besides 3 cars and a house mostly owned by Wells Fargo (yes, that's a problem in itself that needs rectifying).

As a healthy under 40 year old with young kids I signed up for a 20 year term policy through USAA.  $500,000 coverage costs me $24 a month.  It's been 8 years now and I may look into extending it (you can convert policies under USAA) to a 30 year just before I turn 50.  It pays off the bills and the house and helps with the kids' schooling if something happens to me.

In reply to Jerry :

Then I just saved you a bunch of money you can now put down on that house loan.

You're welcome.

Jerry said:

In reply to Zomby Woof :

Honestly.....probably not.  Not married, no kids, no significant assets besides 3 cars and a house mostly owned by Wells Fargo (yes, that's a problem in itself that needs rectifying).

So.. who's the insurance for? If you die, is there someone you're trying to help? That's not something you have to answer here, but think about. Life insurance is for the people left behind when you're gone. If you don't need to help anyone, you don't need insurance. But if you're caring for a parent or something, they might need some money to help pay for in home car.

Zomby Woof said:

In reply to Jerry :

Then I just saved you a bunch of money you can now put down on that house loan.

You're welcome.

I think autocorrect messed up "car parts", but thank you still.

I had life insurance when I had a wife and the kids were in school.  No wife and the kids are all self sufficient, I cashed in my life insurance.  The kids will benefit from what is left of my estate anyway.

You don't need life insurance you need long term disability insurance. 

Well I am looking at the same thing. I have a policy expiring next month and have two young kids and a wife. I am also getting close to 50 and the policy that covered me and my wife jumped to $600 per month.

Both my parents died when I was a teenager and I want to make sure my kids have college paid for if something happens.

For 50 that doesn't look like that bad of a rate for a term policy

Rate looks pretty good, but you don't need it. 

FWIW, my wife and I have it. We're 27 and 28. If one of us were to die, the other would likely be too distraught to work for about a year after. So we have it to cover expenses for that year. I think we actually have it to pay for the house, but that worked out to be about $30 for the year for both of us. When we have kids it will go up some more, but not too much. 

I think it was more important when I was married, even without kids.  Then went back to mom beneficiary after divorce, then to the ex-gf, then back to mom.  She'll be 71 in December.  I think I'm going to let it pass.

wearymicrobe said:

You don't need life insurance you need long term disability insurance. 

This. I just bought a life insurance policy with a long term care rider that allows you to draw down your benefit if you require long term in home or in facility care.  If what you're looking at has that rider it may still be worth it...

wearymicrobe said:

You don't need life insurance you need long term disability insurance. 

I did this as well, I got a LTD policy through Thrivent / Lutheran Brotherhood that I think is a decent one; the thing is, there are a lot of these policies out there that aren't very good deals in the end, so you need to do some research before buying anything.

wearymicrobe is correct.  You may also want to consider long term care insurance. If you buy it at your age, it should be affordable.  If you wait 10 years or so, it'll be quite a bit more.

stuart in mn said:

wearymicrobe said:

You don't need life insurance you need long term disability insurance. 

I did this as well, I got a LTD policy through Thrivent / Lutheran Brotherhood that I think is a decent one; the thing is, there are a lot of these policies out there that aren't very good deals in the end, so you need to do some research before buying anything.

Important points for long term care:

Buy it as soon as you can.  The older you are, the more it will cost.

Get a policy that has inflation protection built in.

Get a policy that will pay for nursing home care and in-home care.  Usually in-home will be at 50% of nursing home, but every bit helps

Jerry,

Until you go through underwriting, the quote on the paperwork is just air.

Think of this like layer on a cake. The plate under the cake is " final expenses".  You want this done and paid for in 10 years, whole life.

Next layer, disability insurance.  Covering "living death" is for your benefit, 60% of your current income tax free until you turn 65.  Next is income replacement, ten time your annual income is a bench mark.  A 20 year term means you are renting coverage that evaporates when you turn 70. 

Long term care, LTC is next.  Guys last 2.8 years or less in this phase.  A daily benefit of $500 gets you $250 if you stay home for care.  This means you will have just over $10 an hour,  sobering.  Inflation coverage is a band aid, that you have to have.