Is there an age limit when it comes to life insurance? Will you still be able to find a policy if you are over 50 years old?
While this is one of the most frequently asked questions when it comes to taking out life cover, it is also crucial to understand why there may be an age limit. Here is what you need to know.
What is the age limit?
In a country as diverse as South Africa, there are many reasons why people might find themselves delaying the process of taking out life cover. However, the best time to have a life insurance policy in your name is now.
Most insurers have set the age limit at 65 years old and the minimum age is 18 years old. If you do take life insurance once you are over 50 years old, your life insurer will require you to submit your medical history.
Life insurance is made to grow with you and protect you and your loved ones from some of life's curveballs like being diagnosed with a terminal illness or death.
Why do insurers have an age limit?
The reality of the age limit on life insurance policies is due to the increased level of frailty we face in our lives as we get older. Having a policy while you are still young and healthy can help prepare you and your loved ones when you need it the most. It also means that the older we get the more likely it is for us to fall ill or sustain a fatal injury which can be a high risk for insurers.
Furthermore, it is not only put in place to protect insurers from people taking out a policy only to place a claim in a short period of having it, leaving insurers with a claim rate that they will be unable to keep up with.
The effect of your age on premiums
Since your health directly influences your premiums, you could be footing a high bill that will be become harder to maintain. Therefore, it is crucial to have an important conversation with your parents on having life cover if you are planning on taking out one on their behalf.
If you are planning on taking out a policy as a person who is over the age of 50 years old, but still has not reached 65 years old, it is crucial to have a financial plan in place in terms of how you are planning on paying for your policy. The last thing that anyone wants is having a policy cancelled when they need it the most due to missed payments.
What else can you do to build a financial safety net?
Making plans to build a financial safety net for you and the people you care about is the first step to success. However, it is vital to consult with a financial advisor or set realistic financial goals that will help you reach your goal.
You can always decide to invest and have a funeral policy that can help your loved ones carry out a funeral. Always remember to check that whichever financial institution you decide to invest in or take out any policy with is a registered Financial Service Provider (FSP).