Life insurance is one of the essential financial plans that must have. We need money throughout our lives, even after death! As you are a responsible person of your family, you should care about others. Seniors have a misconception that as they are old, they cannot find any affordable policy. There is actually no official age limit for life insurance but seniors pay a bit higher premium because of their age. Don’t worry; you can find affordable life insurance for seniors and obviously within your budget and limit.
Life Insurance for Seniors – What to Expect?
Life insurance policy is to protect the family from any financial disaster if any unexpected happens to the policy holder. Some people also like to use it as an investment. However, seniors look for a policy that can cover very basic expenses (like debt, mortgage, and funeral expenses). Hence, the coverage amount for seniors is smaller than others, which is a very positive point to get an affordable one. Seniors can purchase both term and whole life insurance depending on their needs.
Term Life Insurance
Term life insurance offers most coverage within a short time period if you are in good health. This policy comes in some specific time period, generally from 5 to 30 years. Hence, if someone buys a 15 years policy with a death benefit of $200,000, he or she will have to pay a fixed amount of premium every month throughout the 15 years. The premium will never change for 15 years, doesn’t matter what happens to the world economy. However, if the policyholder dies within these 15 years, the beneficiaries will get the full death benefit of $200,000. The policyholder can also get the original amount back with a fixed interest rate after 15 years, and obviously, the amount is not a small one!
Whole Life Insurance
The whole policy covers the rest of the life of the policyholder. As this is a long term policy, the premiums are high in most of the cases. The beneficiaries receive the benefit only after passing away of the policyholder. Besides of the death benefit, you can borrow money from the cash value of the policy but you have to pay that back otherwise it will be deducted from the benefit. This policy also helps to minimize the estate taxes.
Burial or Final Expense Insurance
Burial insurance is quite similar to whole life insurance. Actually, it is whole life insurance with a small death benefit. This policy generally covers $7,000 to $50,000 which is meant to cover the funeral costs and any other debts. This policy hardly requires any medical tests as the coverage amount is very small. Very basic medical documents are checked before giving this plan. This policy is a great choice for seniors over 80 years.
Health and Age Can Affect Your Premium
Health, age, and life insurance premium are very closely related. Health is one of the most important components that an underwriter considers before issuing a policy. The healthier you are the lower premium you pay. With age, senior’s health condition drops and this is a big enemy for any life policy. Most of the insurance companies require a medical exam for a policy. However, seniors can buy guaranteed acceptance life insurance with no waiting period; that’s expensive! It is always a good decision to go for medical test, doesn’t matter how your health is unless you have any deadly disease.
As previously discussed, a term policy can be up to 30 years. But, people aged 50 to 55 years at maximum can get this policy. With age, options decreases. Seniors over 70 years can only buy 10 to 15 years term insurance.
Nevertheless, you can get life insurance at any age but cost varies. Many companies offer life insurance for seniors over 90, but your age and health condition matters a lot.
Last Few Words
Each of the life insurance company offers separate rates for each client. Hence, there is no accurate company that will be suitable for you. All you can do is, compare rates from top providers and find out which one satisfies your needs.
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