Buying Life Insurance for Seniors – Read This Before They Buy

Last Updated on April 21, 2021 by Chris H.

Any insurance policy is as good as its ability to uphold its claim.

In your later years, you may look back into your life as a younger person, those of your loved ones or even your assets as you begin thinking about what legacy you have never achieved creating.

What you never realize is the fact that life insurance is one of the only ways to ensure that the hard work and toil are well preserved, and all the people you may have cherished are properly taken care of for all the years to come.

Life insurance for seniors exists. On the contrary, the real issue is to compare the prices of the available policies and find one that fits your requirements.

2 Types of Insurance Policies

With the massive number of strategies for the old individuals, it can be easy to get confused on which policy to get.

The insurance companies themselves go for different names or different materials for marketing to make sure that their products are differentiated from the rest in the market.

All the same, there are two main types of elderly life insurances for those aged 60years or so, in today’s market.  When it comes down to it there are two main types of life insurance…

• Term life insurance
• Cash Value Insurance.

What is Term Life Insurance?

This insurance is one type of insurance in which the company pays a death benefit to the beneficiaries particularly if the policy happens to be active at the moment the insured dies.

This kind of system can be necessary since it may be used to cover the burial expenses or the mortgage debts and also other miscellaneous expenses if in case there are such expenditures.

However, as the name of the policy suggests, this kind of insurance is time-bound. It is set just for a particular timeframe. On the contrary, the term policies would be renewed when the expiration dates are attained to maintain coverage even though the premiums may increase considering the age of the insured client.

Health issues are also concerns since such may determine whether the policy may be renewed or just pay for the increased premiums available.

What would be some of the terms policies for this type of Insurance?

One of the fundamental policies is the guarantee for a renewed feature which allows the possibility of renewing the policy for the elderly life insurance cover of the elder people. On the contrary, the premium will only be increased based on age and not any issue related to the health of the client. The other is

On the contrary, the premium will only be increased based on age and not any issue related to the health of the client. The other is a term to 100.

This feature happens to guarantee the yearly premium to remain the same until the insured client attains the age of 100. In case the insured lives beyond 100 years, all the premiums are bound to stop whereas the coverage will continue.

This kind of insurance, therefore, offers the highest death benefit for the dollar spent.

Cash Value Life Insurance

Insurance companies happen to have created some valuable products under this particular insurance, and thus a lot of confusion may occur when it comes to choosing an appropriate plan.

This insurance cover has both a life insurance component and also the part of the investment. Similar to the earlier insurance, they also happen to give benefits once the insured client happens to die. The policies come in different names depending on what the company deems fit to meet their market demands. Some of the names may include

The policies come in different names depending on what the company deems fit to meet their market demands. Some of the names may include interest-sensitive whole life, variable universal life, or blended universal life covers.

The insurances are permanent and remain active as long as the premium requirements are fully met. Their cash values also build up and would be accessed when the insured client happens to pass away. On the contrary, their annual premiums appear to be greater than those of term life insurances.

It should be noted that while the insured client is still alive, the benefit of the policy belongs to the insured and not the beneficiary whatsoever. Once the insured is dead, the cash value of the policy is added to the available death benefit.

Also, the rate at which the cash value happens to be accumulating will depend on some returns the insured will earn on the funds that he invests. Under this policy, the rate of return guaranteed runs between 2-5%.

On the contrary, their annual premiums appear to be greater than those of term life insurances. It should be noted that while the insured client is still alive, the benefit of the policy belongs to the insured and not the beneficiary whatsoever.

Once the insured is dead, the cash value of the policy is added to the available death benefit. Also, the rate at which the cash value happens to be accumulating will depend on some returns the insured will earn on the funds that he invests. Under this policy, the rate of return guaranteed runs between 2-5%.

What are the examples of cash value policies and features?

Some of the examples of systems and features found in this type of insurance include:

1.  Whole life: it combines demise benefits and cash value benefits and also happens to be the most common policy in the market. With this type of cash value insurance, both the face value amounts and all the premium values happen to remain constant.
2. Universal life: this policy has few restrictions and would allow the insured client to pay any amount of the premium value and virtually at any time. The cash value will, therefore, depend both on the premiums paid by the client and the total amount of interest earned.
3. Variable Universal Life: this policy will provide cash value and death benefits depending on some investment returns. This is done by confirming both the responses received from stock and the total bonds managed by the insurance company.
4. Joint life insurance policies: under this system, the company allows multiple clients to share one life insurance policy.
5. First to die policy: companies will only pay these particular policies once the first client dies after which the policy automatically expires.
6. Survivor Policy: a company pays for this policy once the second person on the policy dies. Mostly, this kind of system is used when there are concerns about paying estate taxes.

3 Things to Consider Before Purchasing a Life Insurance Cover

Some of the most important issues that any potential client should consider before buying life insurance include:

#1 Renewal options

Some of the available tern life insurance policies for the elderly have renewal options whereas others don’t. A client should thus be very vigilant with those policies that don’t provide renewal options.

On the contrary, insurance policies for the elderly mostly have premiums that happen to be adjusting after every few years. Such policies may be very expensive since they would increase the net amount that a client would ultimately pay for the policy.

 #2 Policy organization

Organization happens to be important when it comes to issues concerning financial and legal frameworks. One should find out what sort of life policy they are going for and determine the level of financial organization before buying the cover.

Such a client should also determine the terms and conditions set for the policy and confirm if they fit his or her requirements.

#3 Determine long-term care insurance

With many guys living past 80years of age, the potential requirement for long term care is an expensive yet real possibility. Such financial costs should, therefore, be considered.

Last but not least, before a potential client considers terminating the policy, he or she should remember that purchasing a policy in the future would be difficult since the premiums would be a little higher.

How much will an elderly life insurance plan cost?

The most dominant issue people consider when they look into life insurance coverage is the cost against the need for the cover. Cost itself can be a challenge, particularly when calculating it since there are several types of life insurances.

Also, the cost of life cover is different and unique to each and every individual depending on the kind of cover such person takes. Other factors that would also influence the cost of insurance are the age of the insured client and the overall health of the same client.

As a result, factors that would affect the cost of cover an insured client would pick include:

• Age: it is evident that elderly life insurance cover increases with an increase in age.
• Health profile: health conditions also affect the cost of cover one would pick.
• Gender: since women typically live longer according to statistics, they would pay less for life covers.
• Occupation
• Exams

The average cost of elderly life insurance would be made depending on the factors highlighted above. If in any case any of the available variables change, the cost of the life cover will also change.

Also, there are more factors that may also be considered depending on the state to which the policy applies. They include:

• Whether the state registers high rates of obesity or not
• The extent of natural disasters in a region
• The level of disease epidemics in a region
• The rate of mortality in a particular state due to crimes
• The number of policies in that particular region.

What would lower the cost of elderly life insurances?

It is quite evident that both lifestyle and health are two major factors that influence the rate of life insurances. As a result, the major activities one would perform to lower life insurance costs always have to be aligned to the improvement of health status and reducing risks of all types of chronic medical conditions like diabetes or even cancer.

Other factors that must be considered to lessen the cost of insurance policies include:

• Maintaining a healthy weight to reduce risks of whatever chronic condition that may come by.
• Maintain the heart condition to reduce the risk of complications like hypertension attack, heart attack or even stroke.
• Managing blood sugar to reduce risks that would result in diabetes.
• Most of the elderly life insurance companies will also review a client’s death risks and other work-related accidents.

Where can a client get the best rates on elderly life insurance?

Depending on the situation of the client, it is recommendable that such customer would choose covers from one or two senior life insurance companies at going.

This is because the companies may have their kinds of considerations to make depending on several factors. The factors would include lifestyle, age, health or even overall needs of the client. Some of the available life insurance companies for the seniors would include Gerber, Fidelity, Assurity, Lincoln Financial, Prudential, and Transamerica.

These are some of the best insurance companies ever.

Assurity Insurance gives you cover from the day you sign the cover deal to the agreement day. Before the age of 65, the cost may be up to $50,000 after which the maximum amount is $25,000 according to the benefit plan.

Fidelity Life Insurance company, on the contrary, offers hybrid term life insurance policy which will ensure that the client gets coverage within 48hours. According to this policy, 1/3 of the coverage is term insurance while the rest is accidental death insurance.

Gerber insurance offers coverage to the youth but also provides services to the senior people. However, one would also consider choosing covers from the Prudential Life Insurance Company. This company happens to be having high brand recognition. Most of the senior people recommend using this company as their first life covers.

Prudential is unique in the sense that it provides specific underwriting guidelines that have been proved to be working for the client. Furthermore, the instructions provided ensure that the company provides the most affordable life insurance at a fair price for the seniors.

Last but not least, the Transamerica Life Insurance Company is another company offering quality life insurance cover for senior clients. The cover is affordable mostly for clients of about 70years and above. Unlike other available life insurance companies, this company proves to be working with the senior group of customers.

The terms offered by the company are old insurance policies for the senior just above 80years. For instance, if a customer is 71 years old or above, and with a blood pressure which reads 145/85, then the client would qualify for one of the best rates in the market.

Another client who will get the best rates from the company is one who has a 5.5 cholesterol ratio. It would be evident, therefore, choosing a particular kind of senior life insurance policy will depend on several considerable factors.

A potential client is therefore faced with a challenge of proper scrutiny of the available companies to reduce risks of choosing inappropriate or extravagant life covers.

Which Kind of Life Insurance Policy is Right For Seniors?

In the end, the right life insurance policy all depends on your situation.  However, if I had to recommend a certain life insurance plan for seniors I would recommend term life.

The reason being is that term life is cheaper upfront and because you’ll never get the full value from a cash value policy.  Cash value policies are designed to get cheaper as the policies cash value account builds up.  However, if you’re already a senior you likely don’t have a lot of years left to get receive this advantage.

So what are your thoughts, what kind of life insurance are you thinking about getting?  I would love to hear your thoughts about this in the comments below.

Cheers!