If your dependents depend on you for financial support, life insurance can help cover funeral and end-of-life medical costs, estate taxes and any debts.
As you age, term policies become less affordable; whole or universal life insurance may be a better solution as these can last until your death without needing medical exams or health questions to apply for coverage.
Cost
Life insurance for seniors requires careful consideration when purchasing, such as cost, coverage options and requirements and whether or not it’s necessary. For instance, if there are no dependents who rely on your income or a sizable estate to leave behind it may not justify its cost; however, life insurance is an excellent investment that provides security against end-of-life expenses as well as future care costs.
life insurance may cost more for seniors, but you can still find affordable policies with numerous advantages. Options may include term life insurance with lower premiums and shorter coverage duration; or whole or universal life coverage lasting your entire lifetime as long as premium payments continue.
Some companies offer whole life policies tailored to older adults that make purchasing life insurance much simpler, as you won’t require taking an exam and can simply answer some health-related questions on an application form. These types of policies are also known as final expense life or funeral policies and can be very affordable options for seniors.
Finding an insurance provider with an excellent track record and fast claims pay-out is paramount to selecting an effective policy. To do this, use the NAIC Consumer Insurance Search tool or read customer reviews online as indicators of how each company treats their customers.
Consider when your coverage will expire as part of your planning process. Some policies have set termination dates (usually at 95 or 100), while others can expire anytime depending on their terms. If you decide to cancel your policy early, any cash value accrued will be returned minus any surrender fees charged by insurer.
Coverage
Life insurance policies offer a lump sum payment known as the death benefit upon death, which can be used to pay off mortgages, funeral costs or supplement your family members with lost income. They may even provide your beneficiaries with additional sources of income through investing. When selecting a policy it is essential that all aspects are carefully evaluated – talking to an advisor can assist with calculating coverage amounts as well as choosing an ideal type of policy suited for you situation.
Traditional whole life policies tend to be more costly than term policies, requiring you to go through an intensive medical examination and meet minimum criteria in order to qualify. While you can purchase traditional whole life policies up until age 80 (depending on which company offers this feature), few companies currently provide this option.
Your health is the single greatest factor influencing the cost of life insurance. Your insurer will evaluate both current and past health conditions to ascertain your life expectancy, which then allows them to calculate premiums accordingly. Your health conditions, lifestyle choices and driving history all play a part in how much coverage costs.
Guaranteed issue life insurance provides life coverage without the need for medical exams; however, such policies tend to be much more costly than their counterparts that require one. When filling out your application for guaranteed issue life insurance policies without medical exams you must be honest when inputting information as any discrepancies could lead to its denial or cancellation.
Seniors looking to leave behind an inheritance can consider purchasing a final expense policy as an economical means. Although less costly than whole life policies, these final expense policies require good health to qualify.
Purchase of universal life insurance policies (GUL). GULs provide permanent coverage against accidents and illness; typically there is a two-year waiting period before your beneficiaries can claim the death benefit; however, this type of policy tends to be more expensive than its whole life counterparts.
Taxes
Life insurance’s tax ramifications can be complex. While its death benefit is usually tax-free, premiums are usually subject to tax depending on your type of policy and individual circumstances. Furthermore, some policies have internal policy costs such as administrative fees, charges for riders or any additional expenses incurred as part of its coverage.
Consider what financial obligations will remain after your death, such as mortgage and education expenses for children, when determining how much coverage is appropriate. Online calculators can help determine how much cash will be needed. Age, health and lifestyle influences the cost of your policy as well; smoking may significantly raise its cost while dangerous hobbies or occupations could increase it further.
Typically, young and healthy individuals will enjoy lower premiums; however, there are exceptions; people with serious medical conditions like cancer or heart disease may have more difficulty being approved for life insurance; in such instances accelerated death benefit riders may help pay for final expenses and nursing home care expenses.
If you miss a premium payment, typically there is a 30-day grace period to make up your payments without incurring interest charges and reinstate the policy without it lapseing. After this point, any overdue premiums and interest owing are payable and an exam must be scheduled to reinstate it.
Life insurance policies are typically sold by independent agents who have access to multiple life insurance company products and can compare prices, as well as work with you to identify the type and size of policy that best meets your needs. They can also answer questions regarding cost or tax ramifications associated with different policies.
Term life insurance is the most popular form of life coverage, offering a lump-sum payout if you die during the time frame specified in your policy. Premiums for term policies tend to be lower than those associated with whole life policies but don’t accumulate cash values over time.
Options
At any age, purchasing life insurance is possible; however, coverage may be limited and finding one without medical underwriting can be more challenging. Expect at least a two-year waiting period. Many companies provide Final Expense Insurance policies designed specifically to give seniors peace of mind in case of natural or accidental deaths.
Your choice of life insurance depends on your unique situation and goals, such as supporting dependents who depend on you financially. A life insurance policy could help them cover estate taxes and end-of-life expenses that arise after you pass. No matter your age, it’s essential that you compare quotes before making a decision; one good place to start may be by reviewing current assets and debts.
Term life insurance can be the least costly form of life protection available, yet only offers protection for a set period of time. For instance, those over 80 won’t be eligible for term policies lasting beyond 10 years; additionally it’s wise not to purchase through mail as these will often come with two year waiting periods and can cost significantly more than purchasing directly from an actual life insurer.
Whole life insurance may be more costly than term insurance, but it provides permanent protection as long as premiums are paid on time and accrue cash value, which you can borrow against or withdraw if necessary. Whole life policies are particularly advantageous for seniors over 80 who require small death benefits to cover funeral and end-of-life expenses such as burial or cremation fees or as inheritance funds for loved ones. Some policies even offer living benefits that give early access to this death benefit should you become terminal, chronic, or critical illness sufferer.
