BUYING LIFE INSURANCE FOR SENIORS
Life insurance can do some pretty amazing things for people. It can buy loved ones time to grieve. It can pay off debts and loans, providing surviving family members with the chance to move on with a clean slate. It can keep families in their homes and fund a child’s college education. It can keep a family business in the family. It can provide a stream of income for a family to live on for a period of time. However, for Seniors, life insurance is about weighing the pros and cons.
SENIORS AND LIFE INSURANCE
When it comes to life insurance companies, the approval process can get complex. Most companies are more likely to pay a death benefit to a Senior rather than a younger policyholder. For this reason, premiums are normally higher than they would have been when they were younger, meaning Seniors should explore the question: Is life insurance worth the cost?
Just like any other form of insurance, life insurance isn’t a “one size fits all” option. Old age and health problems increases premium rates, so Seniors may get to a point where it may not be worth it.
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There are a few situations in which this may be the case:
- Premiums are too high for the end benefit
- Dependents are self-sufficient and don’t rely on you for care
- Your mortgage is paid off and there is no debt tied to your name
One thing is certain. Everyone should consider the cost of their final expenses and burial and make sure the necessary funds are available.
Living without life insurance could potentially be very risky, so it’s important to work through the process and ensure you’re covered, with or without life insurance. Seniors may find it more logical to find other ways to provide for their loved ones after they’ve passed such as savings, home equity, or other forms of insurance.
On the other hand, there are those who find life insurance more of a bequest than a need. These people may want to use life insurance to leave a legacy for their children, grandchildren, or even a charity. In this case, life insurance would be a great way to contribute to those values.
TERM AND WHOLE LIFE INSURANCE
When it comes to life insurance, there are two main types: term and whole life. A term life insurance policy provides coverage for a specific amount of time, typically has no cash value, and it normally less expensive than a whole life policy. A whole life policy lasts the term of the insured’s life, builds cash value, and tend to be more expensive.
Term life insurance may be a good fit for some Seniors. However, look closely at the age requirements as most companies have different issue ages and often term insurance is not available at a Senior’s higher issue age.
OTHER INSURANCE OPTIONS
For Seniors, there may be other avenues to explore if they don’t think life insurance is appropriate for their situation.
PRE-NEED FUNERAL PLAN
With this type plan, money to cover the cost of the predetermined expenses of a funeral, cremation, or burial is held in a trust, in an escrow account, or paid through an insurance policy on the life of the person covered by the plan.
LONG-TERM CARE INSURANCE
Long-term care insurance may be a good fit for Seniors who can’t afford to use their savings or estate for nursing homes or other care takers. Long-term care insurance can be a good option for those who need the help. It becomes more costly as you age, so we encourage you to speak with your insurance professional to find the best option.
Life insurance for Seniors comes down to the amount of income they can put towards coverage. Unless you have unlimited funds, there is a balance between coverage, your final expense needs and your desired legacy when you pass. Regardless of your situation, every Senior should discuss their options with a licensed insurance professional before purchasing any coverage.
Categories: Insurance, Life Insurance, Term Life Insurance, Whole Life Insurance