You should meet with a financial adviser representative as soon as you can to determine what kind and how much protection you need, balanced with how much you can afford. Your financial adviser representative would then be able to present the options that are available to you.
Some of the considerations include:
1. The type of protection you need
Protection benefits can be broadly classified into living and death benefits.
• Living benefits
As the name implies, living benefits refer to payouts while you're alive. There are many policies available in the market to let you obtain financial protection against a variety of scenarios such as hospitalisation, major illnesses, disability, and so on.
This protection is meant to help you pay for medical treatments, long-term care, or as a form of income replacement in the event that you're unable to work (due to disability, for example). The payouts should also help you and your family cope with bills and living expenses.
In your 50s, the likelihood of being in poor health increases, and it’s all the more important to ensure you're insured against these possibilities.
• Death benefits
Death benefits are payouts upon death, typically purchased as a financial safety net for loved ones.
If you're in your 50s, it's likely you still have dependants – whether it's aged parents or children who are still in school – and protection plans with death benefits can help to ensure your family won't be left unable to pay the mortgage, outstanding debts, your children's education or their living expenses, should the worst happen. The more financially-dependent your family is on you, the more important it is to ensure that you have adequate coverage.
2. How much protection do you need?
The amount of coverage – commonly known as the sum assured in insurance terms – requires some thought, but isn't difficult to determine.
One method to approach this is to add up the expenses that you'll want covered for your loved ones over a set period of time if you were not around to provide for them. For example, you may want your life insurance to pay off your mortgage, children's education, and living expenses for your family for 10 years, so they need not worry about how they would cope financially.
A professional financial adviser representative would be able to help you with this.
3. Affordability of premiums
As you get older, the likelihood of poor health increases. Since the insurer would be taking on this higher risk, premiums for protection plans are typically higher for those purchasing at an older age.
At an older age, you may also already have pre-existing conditions. Depending on the type of coverage you’re going after, you may either face a loading on premiums in exchange for full coverage, or the insurer may choose to exclude coverage on certain conditions.
However, having some coverage is better than none at all. If you are reconsidering insurance because you feel the premiums quoted are too high, you should consider how you might pay ($5,000, $10,000 or even $50,000) in medical bills – and this can happen any time and recur at unpredictable frequencies. Ultimately, the cost of insurance premiums is far more manageable and predictable than unexpected expenses you would face in the event of hospitalisation, major illnesses or disability.
4. Saving for retirement
If you're in your 50s, you’re probably also concerned with retirement savings. You can check if your insurer has riders available to ensure that your retirement savings plans stay intact even in the event of a major illness. This is especially so in the case of an illness such as cancer for which the survival rate is increasing; hence requiring you to protect your retirement fund.
Aviva's MyRetirement plan, for instance, lets you purchase a Cancer Premium Waiver rider. In the event that you're diagnosed with a form of cancer that is covered, the insurance benefit kicks in to pay future premiums for you – not only won't your policy lapse, your policy will continue to grow to build up your retirement nest egg.
5. Coverage beyond 50
Traditionally, protection plans provide coverage until you're 65 – 75 years old but it is becoming common for insurers to offer coverage till age 99 to address the increasing lifespan of Singaporeans. For those looking to leave an inheritance behind as part of their legacy planning, purchasing death coverage till age 99 is an easy way to ensure your dependants will be left with a sum of money upon your passing.
For those who already have insurance plans, it's also good practice to regularly review your insurance portfolio at least once a year to ensure they are still relevant to your needs. Changes in your life, such as the number of family members, your age, income and lifestyle, also mean that the level of protection you require will change.