Seniors have much to consider in order for them to find the best coverage at affordable rates.
For example, as you age, your needs for life insurance change. What you require at 35 isn't what you'll require at 65. Seniors may be thinking about end-of-life arrangements so they don't transfer that burden to their loved ones they leave behind. Generally, by this time in your life, your children are grown and you're getting ready to enjoy retirement.
No matter how old you are, it's never too late to consider life insurance. Here's what you need to know about finding a life insurance policy.
Senior life insurance personal considerations
Unpaid debt — If you have substantial debt, such as a mortgage or high credit card bills, a life insurance policy can ease this burden for your loved ones in the event of your death. If you have a lot of debt, consider working with a financial advisor to help you pay down your debt with a smart strategy.
End-of-life arrangements — While the average cost of a funeral isn't cheap, life insurance can help your family handle costly medical bills and final funeral arrangements. You may want to consider final expense insurance if you have a family or if you have a pre-existing health condition. The good news is that final expense insurance can be affordable, and premiums generally do not increase over time.
Inheritance — Life insurance provides a tax-efficient way of leaving an inheritance to your children, grandchildren or others who are special to you.
Senior life insurance additional considerations
Low-cost life insurance — If you are a senior who is on a tight budget, you will undoubtedly be looking for a low-cost policy that will still provide you with the coverage you need. If you are still working, you might want to opt in to a group plan, and if you're not, make sure you get a variety of quotes and compare rates. One company may see you as more of a risk compared to another. Affordable life insurance for seniors is possible with a little research.
Common types of life insurance
Now that you have determined that you need to purchase life insurance as a senior, it's time to decide which type of insurance is best for you.
Final expense insurance — Final expense insurance can protect your family from the burden of final expenses, like funeral, burial and medical costs. You may want to consider final expense insurance if your family is grown or if you have pre-existing health conditions.
Term life insurance — People over 65 may overlook term life insurance. One of the key benefits of term life insurance is that it can be more affordable compared to whole life policies. This can make them a good choice if you're a senior in good health and looking to buy life insurance with lower premiums than whole life or another type of permanent policy.
Many insurance providers offer a choice of term benefit limits (some carriers as low as $10,000), term lengths (as short as 10 years) and additional policy riders to enhance your coverage. This flexibility allows you to select a policy based on the amount and length of coverage you need. If you're a senior looking for options to cover final expenses and outstanding medical bills while leaving something for your children or grandchildren, a term policy may be a good option.
Permanent life insurance — Permanent* life insurance is designed to last a lifetime and may provide additional value beyond the security and assurance of death benefit protection. It provides the ability to accumulate cash value on a tax-deferred basis.
Generally speaking, the older you are, the more expensive life insurance coverage gets. That's why the sooner you get a policy, the better. More information on life insurance for seniors is available here, which can help as you're trying to decide which policy is right for you.
Whole life insurance — Whole life insurance provides permanent protection, provided you make your payments on time and don't miss a payment. The drawback is that premiums will be higher than with term life, but the plus is that whole life insurance earns cash value at a set, fixed rate. Another benefit is that if you are short on cash, you can take a loan out, but know that a loan will reduce the cash value and death benefit of the policy as long as it remains outstanding.
*As long as premium payments are maintained.