Life insurance is one of the most unpleasant yet important things to talk about. However, the older you get, the more important it becomes to think about how you will take care of your family after you’re gone. Having the right life insurance policy will give you peace of mind that your family members will be financially secure in your absence.
Finding the right insurance policy for your individual needs can be difficult, especially for seniors. However, you can find the insurance coverage that fits your needs and your budget with due diligence. Continue reading to learn what all seniors should know about shopping for a life insurance policy.
You can qualify for life insurance.
One of the most common struggles for senior citizens is finding affordable life insurance. Most insurance policies require applicants to submit to a medical exam and health questions. If you’re an older applicant with serious health conditions, it can seem like your insurability is anything but ensured. However, there are insurance policies designed especially for seniors and people with health conditions.
Final expense insurance is a popular type of whole life insurance among older people. Final expense coverage is easier to qualify for than other types of life insurance, but it also has a lower death benefit than other whole life policies.
Guaranteed issue life insurance is another popular type of senior life insurance policy. Guaranteed issue life insurance policies typically have lower death benefits and higher premiums, and the policyholder isn’t covered if they die within the first few years of the policy. However, the policyholder will get a refund of the premium payments with 10 percent interest.
Seniors pay higher premiums than healthy young adults.
As you know, insurance is all about risk. The riskier you are to insure, the higher your premium will be. So, it makes sense that seniors pay more for life insurance than young adults, especially considering life expectancy is one of the factors in determining premiums.
Final expense life insurance is the most affordable senior life policy. The death benefits for this policy range between $2,000 and $50,000. These smaller life insurance policies may not pay off your mortgage, but the payout should be more than enough to cover your burial costs and leave your spouse money to take care of themself short-term.
You’ll need to take a medical exam.
As mentioned before, getting a physical exam is central to the life insurance application process. Of course, this is the most unnerving part of the process for many seniors. However, if you don’t have any serious health issues, getting a medical exam could help you save a lot of money.
If you’re a senior with a serious medical condition, you should probably opt for no medical exam insurance coverage. For instance, guaranteed issue life insurance policies have to provide coverage regardless of your age or health. You’ll have to pay more for life insurance, but it’s better than having no insurance at all.
Some life insurance policies have a cash value component.
Of course, the purpose of life insurance is to take care of your beneficiaries after you’re gone, but wouldn’t it be good to see your policy at work while you’re still living? Some life insurance policies, such as whole life and universal life insurance, have a cash value feature. With these policies, a portion of your premiums goes toward the insurance policy, and the rest goes to a cash account that earns interest.
The cash value of a policy is different from the death benefit. You can make withdrawals from your policy’s cash value, and you can even use it as collateral for a loan.
As you age, it becomes more important to secure your family’s financial future. Even though seniors often struggle to find affordable life insurance coverage, there are plenty of options available. The key is to do your own research and find the type of life insurance policy that’s best for you.