Over 50s Life Insurance
Many people in their fifties have a second property. Whether it is a vacation home or a rental property, it comes with both benefits and headaches. It has maintenance costs, taxes, insurance, and a variety of other costs that are in addition to any mortgage the owner might have on the property. Upon the owner’s death, someone will have to deal with the headaches and maintenance costs associated with the second home. Even if it has positive equity, the overhead costs required to upkeep or sell the second home could seriously reduce the owner’s estate. Fortunately, an owner can help their loved ones cope with the stress by purchasing a life insurance policy to cover any associated costs of the home.
How Much Life Insurance Is Required?
The amount required will depend upon many financial factors, and only the owner can determine the necessary amount. However, some common considerations are the principal remaining on the mortgage, monthly or yearly maintenance costs, taxes, and property cover. Additionally, if the second home needs to be sold as part of the owner’s estate, there will be costs associated with the sale such as closing costs and realtor costs. People in their 50s are at a good point in their lives to help their loved ones deal with an estate with a second home. The owner is still young enough to get additional cover if required, but they are also old enough to be able to make a good estimation as to how much insurance is necessary.
What Is the Best Type of Life Insurance?
Life insurance can be a term life cover or a permanent life cover that includes a cash value. Permanent cover may be a whole life or a universal life policy. While only the property owner can decide which type of life insurance best fits their financial needs, a term life insurance policy is often the best choice. Term life insurance is for a specific number of years, and the owner can time the policy to coincide with the number of years remaining on any mortgage. Because it normally has cheaper premiums than its permanent life counterparts, term life insurance can reduce the costs of the cover while still providing the required protection. Once the mortgage is retired, then the need for additional life cover may no longer be necessary.
Can People Over 50 Qualify for Life Cover?
The answer to that question is a resounding yes. It’s common knowledge that the average lifespan of people has been continuously increasing over the last several decades. Insurance companies know that a healthy person can easily live for another 30 or 40 years beyond their 50s. Consequently, most insurance companies are more than willing to provide over 50s life insurance. Additionally, the premiums for a term life policy will still be very affordable for a healthy person in their fifties.
Who Should Be the Beneficiary of the Policy?
That question is best answered by an estate planner or an attorney specializing in real estate. The insured could make their estate the beneficiary of the policy, but the funds may or may not be available immediately. Because the costs of maintaining a second home will continue to accumulate after you die, you may want to make sure your dependents have a source of money that is liquid. A term life policy may well be the solution, but an estate planner is in the best position to give advice on beneficiary options.
Owning a second home can be a joy for the owner while they are alive, but it can also be a thorn in the side of any loved ones they leave behind. By taking the time to evaluate the financial needs required to handle a second home as part of their estate, people can ease the burden left on their family members. Purchasing term life insurance can go a long ways towards helping the owner’s spouse, life partner, or other family members deal with a second property while the owner’s estate is being settled.
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