Life insurance is an excellent investment no matter the stage of your life. In the past, seniors could often have extreme difficulty finding life insurance, but today, the internet has changed things dramatically, and seniors who look online may be shocked by the choices they find!
Why Should Seniors Consider Life Insurance?
At a glance, here are the top reasons for getting life insurance as a senior:
- Covering funeral costs. According to the National Funeral Directors Association, the median cost for funerals with burial or cremation was $9,135 and $5,150 in 2019 respectively .
- Taking care of your relatives’ needs. Senior life insurance benefits could help your spouse, children, or grandchildren take care of the ongoing costs of their medical treatment, their education, and not only. Furthermore, considering that these days, seniors often work no less than younger adults , it’s likely that your spouse or other relatives rely on your income. Well, life insurance could allow your loved ones to avoid financial burden once you are gone.
- Taking care of your debts. If you have outstanding credit card debt, loans, or mortgage, then life insurance would help your relatives pay them off. You certainly don’t want your children or grandchildren to have to assume responsibility for your debts.
- Inheritance or donations to charity. The life insurance benefits could serve as some sort of inheritance too, and they could also be directed to charity.
How Easy Is It For Seniors To Get Life Insurance?
As a senior, you may be thinking that getting life insurance is very challenging or next to impossible.
Well, it is indeed true that finding a good life insurance policy is more difficult for seniors, especially cost-wise. Insurance premiums increase as you age . But if you know what you are looking for, age will not be an obstacle.
The two main things to consider when looking for senior life insurance are as follows:
- Whether or not a medical exam is required. Some insurance policies require that you complete a medical exam to determine eligibility and premiums. Seniors in good health are more likely to be able to acquire a good policy at affordable rates. On the other hand, smoking, excessive weight, or medical conditions could increase insurance costs since the insurance provider would consider you “high-risk”.
- Age limits. Typically, insurance providers impose purchasing age limits on their policies. Some companies may welcome people as old as 80, while others will set their limit at 60. The latter options typically come with lower costs and better benefits.
Regarding age, do note that the limits usually apply at the time of policy issuance. After you get a policy, most insurance providers will allow you to renew coverage up to age 120. With that, getting senior life insurance early can be important.
How Much Coverage Do Senior Life Insurance Policies Provide?
Life insurance coverage varies from plan to plan and from provider to provider. Aside from that, you need to consider the type of life insurance.
Among the important forms of senior life insurance to know about are :
- Term life insurance, where the policy is temporary and provides coverage for 10 to 30 years.
- Whole life insurance, where the coverage is active as long as the policy is in force and is paid for. Some whole life insurance policies accumulate cash value in the long term – for example, in the form of dividends.
- Guaranteed universal life insurance, which is a blend of term and whole life insurance policies.
These types of life insurance differ in their benefits, age limits, medical exam requirements, and more.
Regardless of your insurance policy type, any policy will provide you with death benefits, the sum of which may range from as little as $5,000 (like burial insurance, a form of life insurance ) to as much as $500,000, or even more in some cases.
Needless to say, the more coverage your policy has, the higher its premiums will be.
Shop Around To Make The Right Decision
You should shop around to find out what kind of policies are available for you and which would work the best for your budget, age, and health condition.
If you aren’t sure what to do, then you should probably address a financial advisor or insurance broker. They can help you figure out where you are right now in terms of finances and health and what would be an optimal insurance policy for your needs.
Also remember that it might be a good idea to get life insurance early on since the rates will likely be more affordable. You’ll have access to a wider range of insurance policies as well.
All in all, however, there’s never been a better time to get life insurance as a senior, and the options available online may seriously shock you!
“Statistics”, National Funeral Directors Association, https://nfda.org/news/statistics.
“Older workers: Labor force trends and career options”, U.S. Bureau of Labor Statistics, https://www.bls.gov/careeroutlook/2017/article/older-workers.htm.
“How Age Affects Life Insurance Rates”, Investopedia, https://www.investopedia.com/articles/personal-finance/022615/how-age-affects-life-insurance-rates.asp.
“A Guide to Life Insurance for Seniors”, NerdWallet, https://www.nerdwallet.com/article/insurance/senior-life-insurance.
“Burial Insurance: What Is It?”, Investopedia, https://www.investopedia.com/articles/personal-finance/111314/burial-insurance-vs-life-insurance.asp.