Budget Concerns: How Much Insurance is Enough?

Thinking Points For Older Individuals Who Bought Life Insurance In Their Younger Years

10 October 2016

Dustin Duncan

Have you gotten older and wonder if you still need the amount of life insurance that you got when you were younger? A number of aging individuals face this hard-pressing question. This is because people often purchase higher amounts of life insurance in their younger years to protect their families in the event of their untimely death. For example, you may have purchased extra insurance to ensure that if you passed away, your spouse and children would not be burdened by your premature passing. The following are a few pointers that you can use to assess your situation and make an informed decision.

Type of Policy

Whole life insurance is a type of life insurance that never expires. This means that it will hold true even if you live another four or five decades. Term insurance, on the other hand, has an expiration date. When individuals buy term insurance they have to choose a certain number of years that will apply to the policy. Some people who buy term-life policies purchase them in consideration of things such as college tuition for dependents. After the specified time of the term life insurance expires, it is considered invalid. Some people buy multiple policies. These individuals find it beneficial to keep their whole life policies, but they may discontinue term life policies that are set to expire soon if they are in decent health.

Cost

If you have a term-life policy or have ever compared the cost of term- and whole-life policies, you likely know that term-life policies are generally cheaper than whole-life policies. This is because of the expiry differences. It is also important to note that individuals who buy term policies in their younger years and forego whole-life policies altogether for the sake of saving money run the risk of having to buy whole life policies later in life that cost more.

An insurance agent or broker is a good resource to use to determine the type of insurance you are best suited for at this time in your life. They may be able to help you discover other options that can ensure that you and your family are protected. Some insurance brokers have access to multiple types of insurance, which means that they may be able to save you money on life insurance policies by bundling it with other types of insurance. For example, you may be able to bundle home, car, and life insurance policies to save on overall costs. 

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