Life Insurance for Seniors – Everything You Need to Know
Obtaining life insurance for seniors is part of sound financial planning. While getting life insurance per se is something that we normally do when we have just started work, are in the peak of health, and have just embarked on a career path, there are factors beyond our control that can put this in the backseat.
Generally, if you practice sound financial planning and were fortunate enough not to get sick at a time when you were physically and economically productive, then you’ll probably be living your retirement quite comfortably. Furthermore, if you have no dependents to think of in your later years, you would not need to worry, knowing that whatever savings you have will take care of their needs.
However, not all are that lucky. More often than not, many senior citizens continue to work well into their twilight years just to support dependents or make ends meet when a breadwinning spouse passes away. If you don’t want this to happen to your loved ones, you should strongly consider getting senior life insurance.
Life Insurance for Seniors – What You May Not Know
Many often get the notion that it’s difficult to get life insurance for senior citizens. Often, this view stems from the lengthy medical checks that the largest insurance companies in the United States require of the elderly who want to get covered.
Because you are already advanced in years — with health issues that further compound the problem — you’re considered a high risk for insurance companies. Risk means that the life insurance carrier has a higher chance of providing a payout to your beneficiaries in the very likely event of your demise.
Let’s face it: The older you are, the more likely it is that you are going to die before your seniors insurance policy expires. Thus, over 50 life insurance policies are typically going to be more difficult and expensive to obtain when compared with regular whole life insurance policies.
Deeming some people to be uninsurable is understandable inasmuch as this is one way for the insurance carriers to protect their financial viability. If they insure too many individuals that are considered high risk, they may end up paying out too many death benefits and risk going out of business.
In the event that a provider does ensure a senior citizen, the monthly premiums can get prohibitively expensive. These policies also come with a lot of restrictions and conditions as well. Thus, it’s easy to understand why a lot of elderly individuals would rather pass when it comes to life insurance for seniors.
Life Insurance for Seniors That is Easy to Apply For
Despite these difficulties, there is life insurance for seniors that’s easy to apply for, requires no medical checkups, and is also affordable.
There are basically two types of insurance for the elderly:
- Simplified issue life insurance
- Guaranteed issue life insurance
There are subtle differences to both, but they each cater to seniors who are looking for some protection for their loved ones in the event of their passing. As you begin comparing life insurance for seniors, these options are certainly worth a look.
Simplified Issue Life Insurance
Simplified issue life insurance is a type of life insurance policy that does not require applicants to answer lengthy health questionnaires. A physical exam is not a requirement for this policy either.
By answering some basic health questions, older people aged 45 to 75 years old can qualify for a simplified issue life insurance policy. The coverage stays in effect for as long as you continue paying the monthly premiums.
Understandably, the benefit amounts are much smaller for this type of elderly life insurance. Benefits usually begin at $5,000 and have a maximum payout of $25,000. Within this range, individuals may buy policies in increments of $5,000. By limiting coverage to smaller amounts, the insurance companies are able to make life insurance premiums more affordable to older Americans.
In most simplified issue insurance policies, the plan accumulates cash value after a certain time period. You can borrow this money should you need to use it for emergencies like hospital expenses or debt payments.
Last but not least, a final advantage of simplified issue life insurance is the fact that you’re covered for the life of your policy and are insured from the moment your application is approved.
Guaranteed Issue Life Insurance
Guaranteed issue life insurance is another type of life insurance for seniors. Available for older adults aged 50 to 85 years old in most states, guaranteed issue life insurance policies do not use the status of your health as a prerequisite for approval, they apply a waiting period of two years before providing the full death benefit. If you happen to die within the first two years, a guaranteed issue insurance policy will still give your beneficiary a limited death benefit in the form of all the premiums paid plus a minor amount of interest.
As with simplified issue life insurance, guaranteed issue policies remain in place for as long as continue paying premiums. Rates are also the same from the start of your policy, and taking out a loan against the value of your insurance is possible as long as it has a cash value. While technically you have to survive the waiting period of two years before a full payout can be awarded to your beneficiaries, most states do provide for a full insurance coverage benefit from day one in the case of accidental death.
Senior Life Insurance – Reasons Not to Delay
Obtaining things like life insurance and funeral insurance when you are already well-advanced in years is still possible, despite what many typically think. Moreover, these life insurance policies also work together with your other existing insurance coverage — that is, your beneficiaries will receive the benefits of this and other insurance policies you may hold. Best of all, they’re made more affordable these days so that an increasing number of elderly people can benefit from them.
When you’re already in your twilight years, you become more selfless. If you have loved ones who depend on you for income and who you know would be crippled financially in the event that you pass away, life insurance for seniors is the best way to insulate them from the financial strain and hardships that your demise will ultimately bring.
