Fact CheckedWhat’s the Best Life Insurance for Seniors? This is a terrific question, and the answer might surprise you.
If you have been reading my blog for any length of time, you know how much I like term life insurance products.
It’s super affordable, which means you can get more coverage for less money, AND it protects you during your most vulnerable years.
From my perspective, term works for MOST people most of the time.
That said, seniors are the exception to this rule.
Find out why now!
What’s the Best Life Insurance for Seniors? Your Age Matters
The life insurance industry is all about risk. The more risk an insurer takes to cover you, the more your premiums cost. As you age, you get closer to death…which makes you a higher risk.
This is why knowing which life insurance birthdays are key is very important. There are maximum ages for specific terms and even a maximum age to hold term coverage.
Clients come to me in their older years looking for protection, and I tailor my advice to their age.
For example, a 50-year-old may still be young enough to consider term coverage, depending on their medical situation and financial needs.
That said a 60 year old really should consider permanent options. This is because:
- Term coverage becomes very expensive
- There are limits on the length of term
- There is no guaranteed payout at the end despite the outlay of cash.
Permanent Life Insurance Options
There are several options to consider when it comes to permanent coverage. As I have mentioned in past posts, life insurance is a very individual product. Some people require millions in coverage, while others only seek small amounts.
The reasons for purchasing a life insurance policy also differ significantly. Your needs directly impact the type of insurance you select.
Many older clients come to see me looking for final expense coverage. These plans typically have a face value of $5,000 – $25,000. The monies are earmarked to help their loved ones pay for funeral costs and wrap up final expenses.
1. Final Expense Insurance
I set them up with small, affordable, whole-life policies for this situation. The good news is funeral insurance is inexpensive and super easy to apply for. Ninety-five percent of all final expense coverage is sold as no-medical life insurance, which does not require a medical exam. Also, seniors should always purchase life insurance policies with no waiting period whenever possible.
2. Universal Life Insurance & Cash Value Coverage
Others are wealthy and want to keep their estate intact. In such a case, we could explore many options, from a Guaranteed Universal Life Policy to other types of whole life with guaranteed and non-guaranteed cash values.
No matter what the situation – one thing holds – I would likely direct them to a permanent policy at this juncture.
“Whole life insurance is a way to make sure your beneficiaries will get a payout, no matter how long you live. There is no specific term length and you cannot outlive your policy, as long as you pay the premiums. A portion of your premiums go into a cash value account. You can borrow from it or withdraw cash. If you’re looking to provide life insurance funds for funeral expenses, whole life insurance is one way to do it.”
What If I Am in Bad Health?
Traditional permanent life insurance coverage requires a medical exam. This is so the underwriters (people who decide your ratings, which determine how much you pay for coverage) can assess your medical condition.
In your elder years, you risk being rated (paying higher premiums) or declined because of your health.
So what if you are not in great shape and want to avoid a medical exam altogether? Well, I have some excellent news for you! Simplified issue life insurance allows you to answer several questions to obtain coverage.
Don’t get me wrong—if you have serious medical problems, you won’t qualify for this coverage—but don’t worry! Guaranteed-issue life insurance protects anyone regardless of their previous diagnoses. There is a catch, however. Most guaranteed-issue policies come with a two-year waiting period.
Wondering What’s the Best Life Insurance for Seniors? Call Us TODAY!
If you are wondering about the best life insurance for seniors, a permanent policy is probably your best bet. Hey, don’t get me wrong; there are always exceptions to the rule.
A 10 to 15-year term may work for a 61-year-old client in excellent health looking for short-term coverage because they still have little to pay on their mortgage. We have to crunch the numbers.
But for the most part, if you want to protect your loved ones from final expense costs, want to leave a nest egg, or want coverage guaranteed to pay out…
…then a permanent policy is your best bet.
