Term life insurance for seniors is a sticky topic. As you grow older, you might find yourself with an increasing number of inquiries regarding life insurance.
The Bottom Line
- Term Range 5 – 30 Years.
- Medical & No Medical, Both Available.
- No Medical Plans are Expensive.
- Maximum Age 75 Years.
- Whole Life Available for Above 80.
In the event of an unexpected passing, the significant financial burden can be overwhelming for your loved ones if you do not have life insurance coverage. A life insurance policy can alleviate the financial burden on your family members once you have passed away.
Seniors can make life easy for their dependents and family if they have a life insurance cover.
A life insurance policy provides financial support to your dependents upon your passing, ensuring their needs are taken care of.
It can also cushion your family form medical bill, death and funeral expenses and other debts such as credit card bills, mortgage payments, and business and personal loans among others.
Obtaining and amending social security benefits often involves a time-consuming process. However, to bridge this gap, a life insurance policy can provide invaluable assistance.
Life insurance benefits are non-taxable and are paid in a lump sum. There are no restrictions on how your beneficiaries will use the money.
Life insurance remains a debatable affair to date. Senior citizens have more questions regarding securing life insurance. Let us look at some of the most questions that the elderly have regarding this topic.
Which Is The Best Life Insurance Policy For Seniors?
As an elderly, the life insurance policies that target the younger generation are also accessible to you. These are common types of life insurance policies that an elderly citizen can subscribe to.
Term Life Insurance Is More Affordable
Most individuals prefer term life insurance. This form of life insurance has no savings or investment component; it is pure insurance. The upper limit term policy in most insurance companies is over 70 years. With less than $100 every month, you can get term insurance if you are in perfect health.
It is an excellent choice for persons in debt, financing final expenses or catering for your spouse and children expenses for a given period. If you want a life insurance cover that will provide for your family for an average of 10 to 25 years, then go for a term policy.
What About A Permanent Life Insurance?
Permanent life insurance and whole life insurance are terms that can be used interchangeability. This form of policy is not a pure insurance but also it has an additional investment or savings component.
Compared to term life insurance, permanent life insurance is more costly. The premiums can be high considering you are purchasing the insurance for an elderly person.
If you have a disabled family member, permanent life insurance becomes the best choice since you already know your dependent will always need insurance coverage. Permanent life insurance is mostly part of a larger estate plan.
For permanent life insurance, we have another article, you can find details here.
Several Types Of Term Life Insurance For Seniors
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Annual Renewable Term
You can renew this form of life insurance every year for a period of up to five years. The premiums are usually very low, but they increase every time you renew. This life insurance policy is ideal for persons who require insurance for a short period.
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Guaranteed Level Term
This insurance cover has set monthly payout in case of your untimely demise in the term. The policy extends for 5-20 years.
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Decreasing Term
This policy includes a death benefit that decreases every year. Though the premium doesn’t change over the term, this is the ideal policy if you aren’t insuring your debt.
With term insurance, there are no guarantees that the policy will be renewed each year. For the annual renewable term, the policy can only be renewed for a specified period.
Here Are Questions We Most Often Encounter:
Is Life Insurance Necessary?
Typically, life insurance is targeted for the young generation. These are the individuals who are starting a family, buying a home, starting out in a career, etc.
Though this package is designed for the younger generation, it doesn’t block out the elderly. Anyone can sign up to life insurance.
Why Should Senior Citizens Acquire Life Insurance?
Several reasons exist why a senior may want to get life insurance.
Below are the main reasons
- A Young Family
In the US the age at which most couples get their first child is raising. If you get children in your late thirties or forties, it is relevant to secure term policy that will mature in your later years. Your children will still depend on your income in. It is essential to ensure that your loved ones are safe in case anything happens to you.
- Debts
If you have no debts, it is possible to have enough savings to cater for your expenses in your sunset days. If you are in debt, life insurance is fundamental. This insurance policy is necessary to protect your children in case of your premature death.
If you want your family to have a hassle-free sent off when you die, you can sign up to an affordable premium. If you have a large estate, term life plan should be part of the state plan. This is an excellent way of off-setting your estate taxes.
- Insufficient Savings
As a senior citizen, if you have inadequate savings, it is necessary to consider a term insurance policy. Your dependents will feel the impact of the loss of income if you pass away and you had insufficient savings.
- Dependents Source of Income
If you pass away and your spouse depended on your pension income for their expenses, they will suffer a huge impact from your demise. This is because the pension income may cease after your death. The best way to save your partner from loss of income after your demise is to secure a term insurance.
Can I Get Life Insurance If I Am Over 65 Years?
Yes, you can get a life insurance over 65.
Seniors can access both permanent and term insurance policies no matter the age. Life insurance companies have limitations though; they have limits for term life insurance.
They generally differ from one company to another. You may not access the policy if you are past the cut-off limit, but you can access annuities and other types of permanent policies.
If you are past a certain age, you may not access specific term periods. For example, if you are 70 years, you can purchase a 10 years policy, but you may not be eligible to buy a 15 or 20 years policy. All in all, you can access permanent life insurance policies like universal life or whole life.
Consider buying age-limited universal life insurance policies similar to term policies if you are past the set age limit.
How Can I Get an Affordable Term Life Insurance Cover as a Senior Citizen?
To get an affordable life insurance policy as a senior citizen, consider the following;
- Conduct Adequate Research
To locate an affordable life insurance cover, make sure you have made comparisons among the different companies that offer life insurance.
Different companies apply different methods to set premiums and rate applicants. Comparison shopping will allow you to locate a cheap insurance policy.
- Buy Immediately
If you purchase a life insurance cover immediately you recognize the need; you are likely to attract lower premiums. Each passing year attracts a higher premium. Any time you think of a life insurance cover, secure the policy, procrastination will cause higher premiums.
- Compare Quotes
You can pot to research and compare quotes, or you can seek the help of an independent age to compare the quotes. An independent agent has excellent skills and experience to compare and contrast quotes from different insurance companies. Comparing quotes will enable you to get the best.
- Embrace a Healthy Lifestyle
You can only attract lower premiums if you are healthy. The best way to stay healthy is to keep track of your lifestyle. Regular body exercise, proper diet and avoid harmful habits like smoking and alcoholism can keep the disease at bay. If you are healthy, you will attract excellent rating and premiums from your insurer.
Can I Choose A Policy That Doesn’t Require A Medical Exam?
Premiums on most life insurance policies are based on the results of medical exams. If you are healthy, you stand a chance of getting cheaper premiums.
Though most of the medical exams are pretty simple, the insurer is looking for signs of future medical problems.
If you are not perfectly healthy, you can consider going for a policy that doesn’t require you to undergo a medical checkup before they sign you in. On the contrary, if you are still young and in good health, a medical exam can lead to lower premiums. Insurance policies that require no medical exams are pricey since the insurer is taking more risk.
Whether to take a medical exam or not depends entirely on your medical history, age, and present state of health. If you are young and healthy, the best option would be to go for a policy that requires a medical exam.
What Should I Look For In An Ideal Term Life Insurance For Senior’s Policy/Company?
Due to many options for life insurance, choosing a life insurance policy/company can be a daunting task. The number of insurance companies offering life insurance for the elderly is increasing. These are useful pointers that can assist you to select the best policy.
- Application Process
An ideal life insurance policy should have an easy application process. Even though you will meet the company representative at one moment, the process should be online.
- Financial Status
The insurance company of choice must have a solid financial base. It should have an excellent rating by third-party companies like AM Best, Standard or the Poors. This will act as a guarantee you will receive your payments when the term expires.
- Customizable Options
When selecting a life insurance company, go for one that allows you to customize your policy. Nowadays life insurance policies that have long-term care riders are the best. A policy with customizable options allows you to customize your coverage term, policy amount or add extra riders.
- Straightforward Terms
Only choose a policy that has clear terms. If you have selected a decreasing term plan, the rate at which the benefits decrease must be clearly stated. The premiums must also be clearly stated. You must also know how soon your beneficiaries will be paid; For example, some life insurance policies won’t pay if you die in the first one or two years.
Which Life Insurance Is Suitable For Senior Citizens With Severe Medical Problems?
If you are a senior citizen with serious health issues, but in need of a health insurance cover, the ideal option will be a “graded life insurance plan.” This policy dictates that full death benefits can only be accessed in death occurs after the two to three years after signing up to the policy.
This policy is perfect for persons looking for final expense life insurance. If death occurs within the policy period, your heirs will receive all the premiums besides a 4- 10% interest.
Can I Use Life Insurance For Retirement?
It is possible to use your life insurance for retirement. You can even borrow against the cash value of the life insurance policy accumulated, but remember, if you default the loan your beneficiaries will receive reduced death benefits.
In a permanent life insurance policy, just like in universal life, variable life or whole life insurance, the cash value increases as a tax-deferred investment.
Last Words
Navigating term life insurance for seniors can be a complex endeavor. However, armed with the right information, the decision-making process becomes more manageable. I firmly believe that this comprehensive guide, addressing frequently asked questions about life insurance for seniors, will serve as a valuable resource when selecting the most suitable policy to enroll in.
