Life insurance comes in various forms and caters to different types of people in certain life stages. Ideally, life insurance policies should be obtained at an early age to ensure that premiums are kept minimal and coverage is maximized.
In reality, not all people are enticed to invest in life insurance in their younger years. Many Americans realize the importance of owning a policy when their age gets closer or embark into the senior years.
Looking for an Affordable Policy?
Fortunately, there are now special kinds of insurance that are most recommended for people who want to get started late in life. The graded benefit whole life insurance is among those.
What is Graded Benefit Whole Life Insurance?
The graded benefit whole life insurance is a permanent life insurance product, which keeps a single premium rate all throughout its duration. After the first two years of the policy, the benefits stipulated in the contract will be implemented in full force.
In case of demise of the policyholder, the beneficiary would be able to claim the full amount listed on the policy if certain conditions are met.
For instance, if the policy offers $100,000 in claims benefit, the amount would be enforced starting on the first day after the second anniversary of the policy.
If claims have to be filed before that period, the amount would only be equivalent to the total of premiums paid plus corresponding interest rate (which also vary depending on duration).
To fully understand the insurance product and its advantages, there are other basic and important factors that must be considered before buying such a policy.
Recommended to Seniors
The policy can possibly be sold to just about anyone. But it is ideal for investors who are in their 50s or older. Insurance experts would assert that the best age to buy this type of life policy is from 50 years old to 70.
Usually, life insurance after 80 years old is the cutoff set by insurers because the product would already become too costly, however, it’s still available.
Waived Medical Exams
Another advantage of this type of life insurance is that there is no requirement for a policyholder to undergo any medical examination.
Those who fear such tests because of their pre-existing medical conditions (which usually incur higher premiums if not a disqualification to own an insurance product) will find this a good opportunity to finally be insured.
Comparatively High premiums
The life plan is not designed to be a cheap product. From the start of the policy, premiums are already hefty but it would not be adjusted further up even if the policyholder ages.
The hefty premiums could be attributed to what insurance companies generally consider as high-risk factors: old age and waived medical examination. However, few companies are an exception and provide affordable policy, compare rates here.
This type of life insurance is often bought by older individuals who intend to leave an amount that would cover their final life expenses or the possible costs of their funeral. Some invest in one to leave modest endowment on inheritance to loved ones or in some cases to their beloved charities.