As we approach our retirement years the need for Life Insurance may no longer seem necessary as we might not need to cover the same financial obligations such as mortgage repayments and children’s education as we did previously. So is there a need for Life insurance in our 50s and 60s?
Planning for uncertain times
Nearing retirement we all hope that all our major life plans have been achieved, but what happens when reality does not live up to the dream? What would happen if you suffered a sudden health crisis, or worse still you were no longer around? Would there still be financial responsibilities which need to be sorted out?
The good news is that on average we are all living longer, with the median age for men now being 78 and for women, 84. The bad news is 66% of deaths in Australia¹ in 2016 were among people aged 75 or older with the leading causes of death being coronary artery disease and lung cancer.
With the number of Australian’s over the age of 65 set to increase over the coming decades, access to quality healthcare will be in more demand. And whilst there is Medicare and private health insurance, the cost of many health related services are increasing significantly.
To reduce the impact of these potential costs, Life Insurance can provide you with that added sense of security by providing a financial safety net which can help you and your loved ones through uncertain times.
Life Insurance options for over 50s
Death cover (often called Term Life) is the most common type of cover for Australians over 50. In addition to paying a cash lump sum, many of these policies can also advance a payment to help with the cost of a funeral and other immediate expenses. Many policies also can include a terminal illness benefit facility where all the funds can be advanced up front if you were to become terminally ill. They may also provide an amount to cover financial advice and preparation of a financial plan as well as grief counselling for the surviving family members.
Other popular product options include Total and Permanent Disability (TPD) and Trauma cover, both of which provide a lump sum if you were to suffer a severe sickness or injury or are diagnosed with certain types of medical conditions such as a heart attack, cancer or stroke.
How much cover do you need?
This will depend on your individual circumstances such as your age, marital status, assets and financial obligations, such as a mortgage and any other debts in particular. You should always consider your personal circumstances when choosing a policy and deciding how much cover you need.
Research commissioned by NobleOak Life² shows that 60% of respondents aged 55-60 would use their savings if they contracted a major illness or were severely injured and couldn’t go back to work, 45% would rely on their health cover or Medicare, 31% would sell their assets and 21% would rely on friends or family. Some 19% said they would sell the family home.
Life insurance can fill this gap in a cost-effective way and helps people better manage and deal with any unexpected events.
Leaving a legacy
Many people planning their retirement or already retired don’t have a mortgage and therefore may not think they need Life Insurance. If you want to leave a legacy to help your children and/or grandchildren, Life Insurance could be a consideration to help ensure your dependants are looked after financially when you are no longer around.
Term Life cover is generally renewable to age 99 when arranged outside of superannuation, however if you have it inside your super the policy will automatically terminate once you reach a certain age, (usually 65 or 70). This is something many people aren’t aware of.
Don’t forget your beneficiaries
When you take out Life Insurance, you will need to decide who your beneficiaries will be and then complete a nomination form. It’s best to do this at the time you take out cover and you should review your beneficiaries on a regular basis to make sure these details are up to date.
Having Life insurance in place can be as relevant for a 60 year old as it is for a 30 or 40 year old. By maintaining Life insurance through the various stages of life, from young family to middle age and on to retirement, you will always have the peace of mind that you are providing financial protection for your family. If you are under age 70 and wish to find out more, call 1300 041 494 to have a no obligation chat with a friendly NobleOak Life representative. Mention LIFE BEGINS to get your first month of cover free*!
Sources:
¹ Deaths in Australia, AIHW.gov.au
² Pureprofile research commissioned by NobleOak in December 2018 with 1,043 Australian respondents.
Information provided by NobleOak Life Limited ABN 85 087 648 708 (AFS Licence 247302) which is the product issuer. This is general advice only and has been prepared without taking into account your objectives, financial situation or needs. Always read the Product Disclosure Statement (PDS) available on our website at www.nobleoak.com.au, for information on what cover is included and what exclusions might apply to any policy you’re considering. People who seek to replace an existing life insurance policy should consider their circumstances including continuing the existing cover until the replacement policy is issued and cover confirmed.
*Terms and Conditions apply. Visit www.nobleoak.com.au/lifebegins
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