While life insurance is affordable and easy to qualify for at a young age, seniors can also get life insurance. Moreover, there are various types of life insurance for seniors. However, their age, health condition, habits, and other risk factors decide their eligibility for a policy and its cost. To help you make an informed decision, we have discussed some crucial facts about life insurance for seniors.
Reasons Why Seniors Should Buy Life Insurance
Life insurance can help seniors if they:
- Have financial dependents or outstanding debts
- Are nearing retirement, but don’t have employer-sponsored life insurance coverage
- Have no assets or savings left to cover their funeral or end-of-life expenses
What Types of Life Insurance Policies Are Available for Seniors?
Term Life Insurance
It typically comes with a shorter duration, say 5 to 30 years. For example, a term life insurance policy will pay out the death benefit only if the policyholder passes away during the policy period. This policy has a fixed premium, but it may increase upon renewal.
Whole Life Insurance
It covers you for life and comes with a death benefit and accumulated cash value. You can choose this policy if you want to leave your money to your heirs. However, a whole life policy is more expensive than a term life policy because of its lifetime protection and added benefits.
Guaranteed Issue Life Insurance
If you are between 50 and 80 years, you can opt for this policy. It is no-exam, costly coverage that provides death benefits (equivalent to the premiums you have paid) with interest if the policyholder passes away during the policy term. However, your beneficiaries may have to wait for 2-3 years to receive the payout. The maximum benefit is $25,000 or less.
Simplified Issue Life Insurance
This no-exam policy comes with term or permanent coverage. Though a medical exam is not required, you will need to answer some health-related questions. The simplified issue life insurance policy can be quickly approved, and the benefit amount can be anywhere between $25,000 and $300,000, depending on the policy type.
Final Expense Insurance
It comes with a small death benefit and is preferably a good option for seniors with health issues and limited insurance needs. However, check whether the final expense insurance is a term or whole-life policy and if your beneficiaries need to wait to receive the payout.
How Much Does Life Insurance Cost for Seniors?
While life insurance costs increase as you age, the extent of coverage plays a vital role in deciding your premiums. So, decide your coverage amount based on:
- Estimate your funeral or end-of-life care costs
- Outstanding loans or debts
- Number of beneficiaries
For example, if your children and spouse are not financially dependent on you or you have no outstanding mortgage, a policy with a small death benefit will suffice.
As life insurance provides much-needed financial stability, getting one will help you live your retirement life with immense peace of mind and comfort.