If you are seeking to know about life insurance for seniors, you are in the right place here. This passion-less write-up will help you know what you need to know and get what you want to get.
Have patience and read on….
Officially speaking, you become ‘senior’ when you turn 65. At this age you are supposed not to require life insurance any more. Now your social security benefits should have come to you. Retirement benefits also should have started to flow in. And hopefully, your children also should have risen on their own feet. But everyone’s life situation is not the same. Many a senior like you is seeking life insurance for seniors.
Perhaps you too have had one of the following reasons that you are searching for life insurance for seniors:
You Have Dependents
You may again have the same old reason people buy life insurance for. You have dependents and you fear that they will have financial stress when you pass away. It may be your second spouse who is younger than you by years. Or, it may be the future of your kids from her that worries you. You may as well have grandchildren who depend on you.
You Still Need Longtime Coverage
Term insurance works for a span of time. Beyond the span, you go uninsured once again. If you still want to remain covered for another period of time, the usual choice for you is to keep renewing the policy every year. For this, you must be ready to pay higher costs each year. If you still want your dependents to stay in the safe financial zone for another long span of time like before, you will need to find life insurance once again.
Failure of Financial Planning
You did not find insurance useful at a young age but now there has arisen need for it. Or, perhaps your financial plans failed for uncalculated situations. Now in the changed situation when you have loans or mortgages to be paid off, you feel you need insurance protection.
Last Rites Bills
As it so happens with many, you may be wanting to find life insurance to arrange your last rites bills. Leaving it behind for people to pay is not the compromise thing for you. You know your family members may find it hard to pay for it a not so scanty bill.
What Life Insurance for Seniors Means
While officially you are a senior citizen at age 65, your search for life insurance for seniors ironically starts at 50. The reason is when you are 50, your dynamics for purchasing life insurance change. By now, you have narrowed down your longevity by decades. You have also probably developed undesired physical symptoms and issues. You do not have the same blood pressure. Your cholesterol level could be higher now. As a matter of fact, the chances of your insurer’s paying out death benefit to your beneficiaries are high. Being business-minded, many insurers would like to turn down your request for insurance.
Hopefully hat should not prevent you from purchasing life insurance. Hopefully, chances are you will get coverage up until age 80.
But that can really be a roller-coaster experience.
While you will have policies available for you, it might not be the very thing you would want. Conversely, you might not qualify for the very policy you would be glad to have.
But having proper knowledge can save you both time and help make the best decision.
You Need to Know
There is no such thing as life insurance for seniors. The fact is when you will buy life insurance for yourself, you will often buy one of the regular types of life insurance policies like you did (if any) in your mid-twenties.
That is to say, you will buy either a term life insurance policy to keep yourself insured for a span of time. Or, you will buy whole life insurance which will sustain till the end of your worldly life.
So, when people speak of life insurance for senior citizens, they actually speak about the different aspects of life insurance which advanced age people like you need to know of.
Are You a Senior?
(A Skippable Discussion)
Once a political euphemism for the elderly people, the word ‘senior’ has recently become a center of a silent controversy in the country. The Baby Boomers are quite averse to the term.
In Dell Webb Baby Boomer Survey 2010, nearly half of the 64-year-old participants denied being identified as ‘senior’ citizens as they considered themselves ‘young at heart’. Ninety-six percent of the 50-year-olds participating in the same survey also rejected the idea.
And, you know that Congress has already passed a bill to extend retirement age to 67 by 2027.
So, whether you should be looking for life insurance for seniors or not can be an issue for a fresh debate.
But the fact remains that many businesses offer discounts to people who are 50 or beyond. Most automobile insurance companies also do the same.
So, from the point of view of usage of the phrase ‘life insurance for seniors,’ we mean life insurance for people beyond 50.
Your Choices for Life Insurance for Seniors
Your choice for life insurance at an advanced age depends on two key points: your age and your objective. Matching of the ball and bat can be really tricky.
You have three options before you:
Level term life insurance;
Guaranteed universal life insurance; and,
Guaranteed acceptance term insurance
Term Life Insurance for Seniors
Choosing the right kind of policy against your situation is important. While many would suggest that you choose term life insurance for yourself, you need to weigh it against your need. You had better not believe in the ‘term is the best insurance’ theory.
You perhaps know that term insurance won’t generally outlast your 85th birth anniversary. However, company-specifically it may cover you for another five years. If you have a dependent who will not require financial support beyond this limit, you can very well go for it.
So, if you are 75 years old now, you can apply for a 10 or 15-year-term insurance policy. But you need to understand that a level term insurance will not cover you beyond tailored packages of 10, 15, 20, 25, or 30. So, if you are 50 and want term insurance to cover you for 40 years, you cannot have it. However, you have options to buy a 25 or 30-year term at 50 and keep renewing it annually up to the ripe age.
Positives of Term Insurance for Seniors
Life becomes more expensive for fixed income people when they become advanced age. Large allocations to budgets are added as you age. For example, expenses for more socializations, education and medical bills tighten the finance. Adding insurance to the budget can be a real burden for you now. Still, term insurance is a good option for you because it is the most affordable of all types of life insurance policies. Though it is going to be costlier than you would have it when you were young, it still remains within your affordability.
Another positive of term insurance for seniors is your dependents’ safety is guaranteed on term insurance. If eligible, the beneficiaries receive the benefit if you pass away within the term.
Negatives of Term Life Insurance for Seniors
Though theoretically accessible, purchasing life insurance beyond 50 can really be difficult for you. Because you already have diminished your longevity, there are greater possibilities of the insurers’ needing to pay the coverage. As a result, many insurers will not be willing to cover you.
Again, the cost of your life insurance will be much higher for you now. The axiomatic saying that term insurance is typically cheaper than you think won’t hold good when you are beyond 50.
You cannot get your coverage without paramedic exam at an advanced age. There are possibilities that health issues will prevent you from getting your insurance.
When your insurance goes off at end-age, you remain at the risk of permanently going out of insurance. If you want to get covered again, chances are insurers will not welcome you into insurance because you are out of insurability age now.
And finally, if you outlive the policy, your beneficiary will not get any benefit.
Guaranteed Universal Life Insurance for Seniors
Guaranteed universal life insurance is a better option for you when you need insurance coverage beyond the age limit of term insurance. So to say, it is an extended version of term life insurance. But unlike what happens in term insurance, its protection goes beyond pre- defined periods. The protection stays in effect until you reach a specific age. So, you can choose the insurance to work for you age-specifically till age 90, 100, 110, or 121. That is to say, unlike the term insurance, you choose an age instead of a period for protection. And it can go beyond the normal mortality age.
Positives of Guaranteed Universal Life Insurance
It is no overstatement that you can purchase guaranteed universal life insurance beyond the longevity years. When you buy it for 120 or 121, it is most likely that your policy will outlive you. As a result, your beneficiaries will to get the insurance benefit that they would need. Thus, choosing the latest age can be a good decision.
Another positive of this policy is you have surrender value on this policy. If you pay for certain years, you will get from partial to 100% of your premiums back.
Again, while guaranteed universal life insurance is not as inexpensive as term insurance, it is way cheaper than whole life insurance. There being no investment component, this policy is quite affordable.
Also, guaranteed universal life insurance is the best of the best choice when you are not in favor of whole life insurance but want lifelong protection.
A big pro of this type of life insurance is your premiums do not rise. The premium is always level.
Negatives of Guaranteed Universal Life Insurance
Despite great positives, buying a guaranteed universal life insurance policy cannot be a blindman’s choice for you. There are odds out there.
There being no cash value this insurance is cheap for sure. But it will never be as cheap as the level term life insurance. Depending on your age and other factors, the cost may be four to five times higher than the term life costs.
While it is surely a good aspect of guaranteed universal insurance that you can you get premium refunds on surrender, surrender option is not user-friendly by any means. Most companies will require you to wait till 20 years or you are going to lose everything. Getting 100% refund requires still more time.
Guaranteed Acceptance Life Insurance for Seniors
Truly speaking, guaranteed acceptance life insurance is the only true life insurance for seniors. It falls in the whole life insurance category. Unless you stop paying your premiums, your protection will stay in force till you are alive. (And this is what makes it whole life insurance.) It can be a relief for people looking for life insurance for seniors. However, you need to understand that this version of whole life insurance is meant for funding your last rites expenses. And you will find this insurance by various names like funeral advantage program, funeral advantage insurance, guaranteed issue life insurance or burial insurance. Final expense life insurance is perhaps the most popular of its names.
Positives of Guaranteed Acceptance Life Insurance
You can buy it literally hassle-free. It does not necessitate you to go through medical tests or even answer health-related questions. You simply apply and get approved.
The benefit provides you mental peace that your people will not have the burden to bear when you die off. If they get the full benefit, they can even pay off expenses other than the last rites costs.
Some companies offer loans on this policy. If you urgently need money, you can borrow against your insurance.
Negatives of Guaranteed Acceptance Life Insurance for Seniors
The death benefit of this life insurance for seniors is rather scanty. Most companies offer from $15,000 to $25,000. If you have worries about your dependents this policy is not for you.
The cost of this policy is pretty high. Compared to the death benefit, the price can seem all scam. Oftentimes, the cost rises incrementally according to periodic tables. This can be far from comfortable for you.
The death benefit comes according to the company’s age-band policy. So the earlier you die, the less you will get. On the other hand, the later you die, the more you lose. There are complaints that the insureds get much less than what they pay to the insurer.
What Mentors Say
Life insurance is a need-based choice. Term life insurance for you beyond 50 can be quite expensive and leaves you out of insurance at expiry. On the other hand, as human longevity has gone up, guaranteed acceptance life insurance often proves to be against the interest of the insured which we have already mentioned. Weighed against the limitations of these two types of insurance, Life Insurance Mentors team suggest that while looking for life insurance for seniors, you do not disregard guaranteed universal life insurance. You may very well consider the pros that guaranteed universal life insurance has.