Life Insurance for Baby Boomers

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  • Post last modified:December 14, 2019

As the age grows, it is seen that problems and challenges also increase, especially when it comes to baby boomers. But the question is why the growing age can be more painful for baby boomers?

The simplest answer to this is the fact that people have to say goodbye to this world, but their families suffer from various financial problems. Also, medical, educational, and health care expenses can be very excessive, especially when living in the US.

Therefore, the best solution is to have life insurance for baby boomers to make sure the loved ones left behind live in peace.

Who are Baby Boomers?

People born between the years of 1946 and 1964 are called the baby boomers, but that’s not enough to define the boons of this generation. If you are a baby boomer, then you are the smartest, most privileged and hard-working generation ever.

Do you know why?

Well! The studies have proved several times that babies born after the end of the Second World War have been active, wealthier, and more physically fit than the rest.

It is because of the social change the world took in the post-war era that has linked this generation with the previous traditions, as well as, with the future of the world.

So! As a baby boomer, you have conquered everything, which new generations are not capable of.

What is Life Insurance for Baby Boomers?

There is no surprise in knowing that every beautiful soul has to taste death. But, those who take this reality for granted are often found to be disturbed on their deathbed. The reason for such restlessness is the avoidance of not planning anything good for their family after they are departed from this world.

And it is also seen that discussing such a topic is considered taboo. People are afraid to think and talk about the lives of their loved ones after they are gone. But remember, as a baby boomer, you have faced many challenges with great planning, so why not plan something fruitful for your family after you are gone.

And no wonder that life insurance can be your only answer to let your soul pass from this world peacefully. So, going for life insurance can help the seniors to fulfill financial problems after death. This helps in providing financial stability to the people left behind, such as children, spouses, and even your parents over 85.

Types of Life Insurance for Baby Boomers

There are different kinds of insurance that can be beneficial for baby boomers. So! Here is a glimpse of almost all the categories.

Term Life Insurance

You have been heard about the term life insurance generally from everyone. It is the ‘pure’ type of insurance, which is taken by almost every sensible person. In this insurance, you just pay the normally fixed premium for the rest of your life until your demise or the expiry of the duration (30 years).

On your departure from this world, the beneficiaries get the amount through monthly payments or in a lump sum. The term life insurance is the most affordable one.

Whole Life Insurance

Whole life insurance can be costly, but its fruits are sweeter than term life insurance. In this insurance, you have to pay the premium for your entire life until your death has arrived.

The best thing about this insurance is that a certain amount from the premium is transferred in a savings account, which helps the amount to grow with time.

This is also called the ‘cash value benefit’, and this is one of the reasons behind this insurance’s popularity because the amount that is saved is multiplied at the end of the day. Also, you receive a fixed amount of death benefit.

Universal Life Insurance

Universal life insurance also provides a death benefit and cash value. But in this type of insurance, you can change the amounts without going or paying (more or less) for a new policy. Also, this insurance permits you to use the cash value to pay for the fixed premium.

However, this can be only advantageous for you if you have a huge amount in your savings account. In that way, only the interest amount is utilized for the payments of premium, and the actual amount is left untouched.

Variable Life Insurance

Variable life insurance is somehow similar to the whole life insurance, but it instead of the amount is being transferred in the savings account, the money is used as an investment. Simply put, the amount that you pay as a premium is invested in stocks.

This is a great way to get great benefits from your policy, but it is also riskier. Because you never know what stocks can bring to you. However, it also comes with a death benefit.

Simplified Issue Life Insurance

Ever thought what makes the insurance organizations decide your premium? Well! It is your health condition that allows them to decide how high or the low premium rate you should be paying. So, the medical exam plays an essential role when you plan to buy any insurance.

But when you go for the simplified issue life insurance, then there is no need to go through the examination process. Only a health questionnaire is required to be filled, and on that base, the policies (premium rate, death benefit, etc.) are planned.

Guaranteed Issue Life Insurance

In guaranteed issue life insurance, there is no need to go for the medical examination or filling of any questionnaire. Instead, you just agree on paying the offered premium by providing the information, such as state of residence, sex, and age.

Final Expense Insurance

The final expense insurance policy is only granted to the people who are in a specific age range. This insurance is a great way to overcome all your funeral expenses.

Therefore, this is the best way to take care of your loved ones at your funeral, and make them realize once again that even after your death; your love for them is evergreen. The coverage of this insurance is between $5000 and $25000 that is more than enough for a grand funeral.

How Life Insurance is Helpful for Baby Boomers?

People are found to be ignoring the idea of buying a life insurance policy, as they think that it’s a waste of their valuable money. But there are times when mishaps take place, which ultimately makes people realize how their family would survive without their presence.

Just imagine, how your dependents would pass along the sorrow of your absence along with mountains of financial deficiencies?

Of course! Nobody would want their children and partners to stay hand to mouth to meet both ends just to pay loans, EMI’s, children education expenses, rents, etc. So, here are some advantages of life insurance you should know.

Secure Future

The thoughts of securing the future of your family and seeing them growing happily at every level are surely satisfying. And what other best way could be than having your life insured.

So even you are gone, your family and parents can still succeed in their lives. As a baby boomer, you can explore the wide range of life insurance, and select the most suitable one.

Family Protection

The family needs love and protection. But how can someone protect his or her family when the time is already up? The simplest answer to this question is life insurance.

And do you know that according to the recent studies by Foresters Financial, 86% of the American citizens believe that they should have a life insurance policy, as seniors are getting aware of the importance of having one for the sake of their family?

This signifies that Americans do believe that protecting their blood relations from future sorrows can only be possible through life insurance.

Works as an Investment

On comparing different life insurance policies, it is observed that they are fruitful than any other investment schemes. The majority of the insurance policies offer great bonuses, which, on the contrary, cannot be found in any other kind of investment.

Yes! There is a risk of loss as well, but that just not happen all the time. So in that way, it is the safest way to increase the amount.

Easy Loan Policy

One of the best benefits of having life insurance for the elderly is that they can get fast loans without making any major efforts. So at any time, you can ask your insurance company to provide loans on behalf of your insurance plan.

There are no strict approval objections like banks because you ask to borrow cash from your own insurance account to which you pay the premium. Therefore, there is no need for the provision of strong references and witnesses.

Moreover, the loan you take on your insurance is also not counted as an income by the IRS, so it’s tax-free too. Whole life insurance and term life insurance are the most suitable types of life insurances where getting a loan is easy.

Peace of Mind

No words can describe how peaceful you feel when you know that even when you are gone, your family is safe, secure, happy, and financially stable. People who wish to accomplish such feelings are never found in distress, as they know that a life insurance policy can sort out all their problems.

On the other hand, your family members feel calm because they know about the great step you have taken for them through buying life insurance.

So, no wonder that it’s a great way for baby boomers to show their love to their families, and gain respect in return.

Things to Consider When Buying Life Insurance

Over time, financial liabilities and age rise. This surely gives a clue that the right time is already here to buy a life insurance policy. Some baby boomers rush without acquiring proper knowledge, and this is where they make a lot of mistakes.

So, to make sure that you avoid making any blunders, here are a few things you should keep in mind before buying any life insurance plan.

Estimate Your Life Coverage

It is important to decide the insurance amount you want before buying life insurance. So, for this, make sure to have a complete need-based analysis, as it will help you understand your goals and the amount you need for them to be accomplished.

It is also mandatory for you to estimate your income before selecting any plan or else you will be unable to pay the premium. In general, you should keep the expected sum to be at least 10 times greater than your annual income.

In other words, your life coverage is directly related to the number of dependents, liabilities, and your current and future salary or income. For example, if your annual income is $30,000, then you must have coverage of at least $300,000.

Do Not Buy Life Insurance for Saving Tax

Many people think that after having a life insurance policy they can be exempted from all the taxes by the IRS. Remember, there are certain things that are required to be released from taxes as an insured person.

So, if you fail to provide any document, then you are surely at great risk. You can also be charged for a serious fraud crime.

Have Clear Financial Goals

To avoid any future problems in your life insurance policy, it is best in your interest to know your financial goals.

For instance, you want your children to study in a reputable university which is costing you $20,000 today, so after 20 years it may cost you $60,000, so you will need a policy that can give you the expected amount after 10 years, and with or without your presence.

Choose the Right Type

You must know the types of life insurance and how they work. Buying any policy without complete understanding or emotional consent is a huge mistake, which can turn into a terrible experience later on. Also, do not just fall for minimum premiums, but choose the one that serves your long-term goals.

Look for Long Duration Term

People are often afraid of investing their money for longer periods. This is why they prefer shorter tenure, as they think they can recover their profits and investment quickly. However, this is an entirely inaccurate approach in the world of life insurance.

Remember, the fruit is sweeter when it is eaten with patience. So, it is always preferred to have a long duration life insurance.

For example, if you are planning to invest $5000 annually to your life insurance policy for 10 years with a 4% interest rate then you would get $5200 after 10 years ($2000 profit). On the contrary, investing the same amount with similar conditions for 30 years will increase the figures up to $156,000 ($6000 profit).

Do Not Give Up Early

So, a few years back you decided to accept all the terms and conditions in your life insurance policy, but you want to back out now?

Keep in mind that giving up on your policy before it approaches maturity can be really expensive, although there is an option in some types of life insurance. But, if you opt for surrendering, then you get peanuts in exchange.

Know Your Right to Claim

You must know how to end something before starting it, and the same rule applies when it comes to buying a life insurance policy. Don’t just blindly sign all the documents or trust the words coming out of the insurance agent.

It is important for you to learn on your own about all the company’s policies and procedures of claiming the insurance amount. It is also observed that some insurance firms have a slow settlement procedure.

So, it is recommended to agree to pay a premium to only those organizations, where the process is quick.

Another way to know your right to claim is to understand the company’s ‘Claim Settlement Ratio’. It will help you in knowing how many claims are successfully settled by the organization versus the number of claims made by the insured. A company with a greater ratio is strongly suggested.

Background Check

Last but not least, to become an insured baby boomer, you have to think twice before signing any legal document. Always remember to know the stakeholders of the insurance company. Also, it is necessary to consider the firm’s reputation in the market.

Sometimes, the insurance company is new but it has a spectacular prestige in the market and among the customers. Therefore, don’t judge the book by its cover, and take calculated steps.

Life insurance is a necessity regardless of age and gender. Nevertheless, the baby boomers are more encouraged to buy a life insurance policy as per their requirements to make sure their families are safe and sound from all the troubles and challenges of life.

Undoubtedly, life insurance can make a huge difference in peoples’ standard of living by enhancing the quality of life.

Linda Chavez

I'm a burial & senior life insurance expert, independent agent, Founder & CEO of Seniors Life Insurance Finder. I have been working in this sector since 2004 and established my own company in 2014. I have a team of seven members, and we are trying hard to share the knowledge we've gathered. We know how difficult often it is to find an affordable policy. Hence, we are doing our best to help you.