If you are over 55, life insurance is more expensive. However, there are options out there specifically tailored to older adults.
What different types of life insurances are available and what companies should you look at?
pexels.com
Type of Life Insurance
Depending on your needs, you can select a life insurance policy to meet your financial plans. We’ll take a look at term life insurance, annually renewable term life insurance, whole life insurance, universal life insurance, guaranteed universal life insurance, and burial insurance.
Term Life Insurance provides the coverage for the lowest price. Terms range from 10 to 30 years in 5-year increments. The premiums remain the same for the term. For instance, you can purchase a $100,000 policy for 10 years. If you die within those ten years, your heirs get $100,000. If you outlive your policy, they get nothing.
Annually Renewable Term Life Insurance is similar to term insurance. However, the premiums increase each year. These are designed for shorter than ten-year terms. People who purchase these types of life insurance policies are generally getting ready to pay off a mortgage or retire and are bridging any potential gap.
Whole Life Insurance includes coverage for the rest of your life. The premiums are the same every year. The policy includes a death benefit and an accumulating cash value that you can take a loan against. The policies are generally complicated and expensive. You probably wont break even for at least seven years and these policies are very expensive. They do earn high commissions for agents, so they are often encouraged.
Universal Life Insurance accumulates cash value that is tied to investment performance. If the investments underperform, your policies are higher. These are not recommended for seniors. Polices are expensive, the market is voluble, and there are expensive management fees.
Guaranteed Universal Life Insurance is a hybrid of term and whole life. You can either choose a term limit or have it last until death. Premiums are the same each year. You can’t borrow against a guaranteed universal life insurance policy cash value. These are great for seniors wanting to leave a legacy or avoid estate taxes.
Burial Insurance is a whole life insurance with a small death benefit between $5,000 and $25,000. This type of insurance is expensive but helps your loved ones cover final expenses.
Top Ten Life Insurance Companies for Seniors
- AM Rating: A-
- Coverage begins:
- Coverage before 65: up to $50,000
- Coverage after 65: less than $25,000
- Offers: No exam life insurance
- Best for: final expenses
- AM Rating: A+
- Coverage age 50-80: $15,000
- Offers: No medical exams
- Best for: Those not in best health
- AM Rating: A-
- Coverage begins: within 48 hours
- Coverage: some policies renewable to 95 years of age
- Offers: No medical exam
- Best for: flexibility
- AM Rating: A
- Coverage 55-70: up to $150,000
- Coverage after 65:
- Best for: high-risk clients with pre-existing conditions
- AM Rating: A
- Coverage from 50-80: $5,000 – $25,000
- Offers: no medical exam, health questionnaire
- Best for: burial costs
- AM Rating: A+
- Coverage 70-95: see agent
- Best for: Less than perfect health
- AM Rating: A+
- Coverage: less than $250,000
- Best for: tobacco users
- AM Rating: A+
- Coverage to age 85:
- Best for: flexibility
- AM Rating: A+
- Coverage: See agent
- Best for: tobacco use, cancer survivor, diabetic
- AM Rating: A+
- Coverage to over 85:
- Best for: elderly clients
Final Word
When looking for life insurance, identify what you want to do with that money – leave a legacy, burial expenses, tax avoidance? That will determine what you need. Take time to investigate the company, reviews and ratings. The companies above have been identified as excellent for senior life insurance, but they aren’t the only ones.
Start your internet search before you get any older!
