Life Insurance For Seniors.
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Senior Life Insurance: Protecting Your Family and Loved Ones
Life insurance for seniors can be an important way to protect your family from facing a financial burden after your death. As more people are living longer, the demand for senior life insurance has increased.
If you’re a senior who’s no longer in the work force, you may find yourself without a life insurance policy if you obtained this benefit through your former employer. Or you may already have some life insurance, but wonder if the face amount will be enough to meet the needs of your loved ones.
Why Do Seniors Need Life Insurance?
You may be well beyond the point in your life where you have young children that will need to be financially supported when you pass away, but life insurance still has some important uses.
Some of the best life insurance for seniors can help provide for the following:
What are the challenges that seniors face today?
Seniors can sometimes have a more difficult time than younger people when it comes to obtaining life insurance. This is especially true for the elderly. Life insurance companies have to consider how many years seniors are likely to pay into a policy before the insurer has to pay a death claim. In addition, seniors are more likely to have developed long-term health issues – such as diabetes and heart disease – that can make insurers view them as higher risks. That doesn’t, however, mean that life insurance is impossible to get when you’re a senior.
Seniors over 60, 70, and 80
Many insurers realize that as life spans are continuing to grow and the number of seniors is increasing, more will need life insurance coverage. The best and cheapest life insurance policy for you varies according to your age, health, and other individual circumstances. The best insurance for seniors over 60 may not be the best insurance for seniors over 70, and 80, so it pays to carefully compare quotes, the types policies, and find a low cost program that suits your needs as you shop around.
You can refer to our age chart to see an aggregated summary of average life insurance rates by age.
Term insurance is one of the least expensive types of life insurance. It’s good for a specified term, such as 10 years, and then the policy is no longer in force. This can present a problem if you outlive your policy and have to try to get a new one at a more advanced age. It’s very commonly used to pay for a specific thing for a specific length of time.
For example, you may want term insurance if you’d like to pay off a mortgage that has 10 more years of payments, or you may want enough to pay off a car loan when you pass away.
Term insurance can be more difficult for seniors to get, since underwriting can be more stringent. This is the process by which insurance companies evaluate their risk, study your situation, and determine whether they’ll issue the policy. Many insurers have a specific age, which can vary from company to company, for which they’ll know longer issue term policies.
As the name implies, this type of insurance lasts for your entire life, as long as you continue to pay your premiums. Part of what you pay is invested in an effort to increase the amount of money your heirs will receive. Generally, this type of program is easier to get than term if you’re a senior.
They’re designed to be kept for a long period of time, in order to build up cash value, so they’re usually more appropriate for seniors in their 50s or 60s than those who are much more advanced in age.
This type of insurance includes whole life, universal, and variable policies. Although they differ somewhat from one another, they all have the goal of building cash value as well as providing a death benefit. Any cash value accumulates on a tax-deferred basis and can be borrowed against in the future. If you don’t repay it, your heirs will receive a reduced death benefit.
You can also usually stop paying premiums if you have enough cash value built up. Depending on your particular policy and the amount of cash value, you may be able to continue your insurance for a period of time or let your heirs receive a reduced benefit.
A GI policy is usually the easiest type of policy to obtain, because it doesn’t require that you answer any health-related questions or have a medical exam. Because of this, it’s often recommended for seniors who can’t get other types of life insurance because of advanced age or health issues. Its rates are usually higher, and the maximum face value of this policy will probably be lower than those common with other types of insurance.
In addition, a GI policy may have a waiting period – often two years – that you must have the policy before it will pay the face value. Because of its limitations, it’s often the cheapest life insurance for seniors over 70 and seniors over 80. Seniors who are over 50 or 60 and are in reasonably good health probably have better options.
The particulars of this type of insurance policy can vary, so if you buy GI, make sure you understand what you’re getting and how long you’ll have to wait before the full value of the policy is in force. Some policies may immediately provide the full value if you die in an accident, but not due to illness. Others may pay your heirs the premiums you’ve paid as well as some interest, but not the face value until a certain amount of time has passed.
Consider the following as you look at different life insurance companies and policies:
Life insurance can be more difficult to obtain in your senior years, but it’s far from impossible. Insurers realize that the number of seniors has grown significantly, and they still want to help take care of their loved ones after they pass away. The company as well as type of policy that’s best for you will depend on your age and health as well as the amount of premium you want to pay and the level of coverage you need.
The best way to find the right program if you are a senior to compare companies. This includes their quotations and the policy itself.
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