Most people believe that life insurance is only of value in the early and middle years of life. During these times it's typical for financial burdens, expenses and family obligations to be at their highest. While this may have been true for past generations, today's seniors have more reason than ever to make sure they have added coverage if needed.
What is Seniors' Life Insurance Coverage?
Seniors' life insurance refers to life insurance policies acquired after the age of 60 yrs of age. Under this umbrella, there are many products to consider when looking at purchasing life insurance. Depending on your health, you may be eligible for term, whole life or some additional options and riders available to these types of policies.
But as we know, with age, come some common health issues and added risks that make getting approved a real challenge. For this reason, seniors over 60 have a third option available to them. Specialty products referred to as No Medical Life insurance allow seniors who are declined or have health issues the option for added coverage, generally without submitting to a medical exam in order to qualify.
Why Would I Need Life Insurance Now?
In an ideal world, the majority of people over the age of 60 would be mortgage-free, debt-free and have fewer financial responsibilities. In today’s day and age, it is not uncommon to be paying a mortgage, raising a second family or supporting adult children well into your golden years.
The desire to pay for college tuition, help with dependants' first down payment on a home, or even keep pace with societal pressure has created a need to dip into retirement funds. In addition, helping out and taking in adult children and grandchildren feels like a necessity for some. This added financial burden often is covered using home equity or other available credit.
When you combine these added expenses with the fact that people are living longer and saving and investing less, it becomes obvious more seniors will need a late-stage plan in place to cover their final expenses. For some a seniors' life insurance policy is a way to avoid burdening their family with expenses or ensuring they are leaving something behind.
What Are the Best Life Insurance Products and Options?
As mentioned, there may be a number of options available depending on your health, the amount of coverage required and the cost of premiums. Here is a quick breakdown of some common policies and uses.
Term Life Insurance
Term life insurance is often a lower cost than whole life with the flexibility to choose how long you want the coverage to remain in place (the "term".) Some term products are also No Medical Life insurance policies. Seniors often opt for Term Life to help provide for dependent children or grandchildren and to financially protect a spouse.
Whole Life Insurance
Whole life insurance often has higher but level premiums in place regardless of how long you live and accumulates cash value. This type of policy is often used for estate planning or to cover final burial costs.
Final Expense Insurance
Final expense insurance is dedicated to funereal and burial expenses. Typically it is easy to qualify for and has a lower premium due to its limitations. This is an affordable option for those looking to ensure there is no burden to the family for their final expenses. Depending on the policy chosen, it will have the characteristics of each type of product as noted above.
While the cost of affordable seniors' life insurance is determined by health, policy type and amount of coverage, there still may be a point where buying certain types or life insurance does not make the best financial sense, and exploring other options may be your best choice.
This is why, when it comes to your insurance needs, a licensed agent can help you compare plans to find the best options.
How Well Do You Know Your Life Insurance?
The more you know about life insurance, the better prepared you are to find the best coverage for you.
Whether you're just starting to look into life insurance coverage or you've carried a policy for years, there's always something to learn.