What life insurance options are there for seniors?
Typically, people don’t bother with life insurance once they have retired, their children have moved out, and they no longer have ongoing financial obligations (like mortgage payments). However, sometimes seniors express an interest in maintaining their coverage or even securing a brand-new policy. But when is it too late for elderly individuals to secure coverage? Here’s what seniors need to know about life insurance.
There is a Cut Off
While seniors can actually secure life insurance coverage, it is typically limited to those aged 89 and younger. This is because, once you turn 90, the cost of life insurance is incredibly high and, therefore, not worth it for most people. That being said, seniors can actually still get a relatively affordable policy, even in their 80s.
Why Seniors Might Want Life Insurance
Usually, seniors do not have financial dependents or ongoing financial obligations to worry out. So, why would a senior bother getting life insurance? Here are some of the most common reasons:
- Family decision– Sometimes, when a senior’s loved ones find out they are uninsured, the family pushes them to secure coverage. They may even purchase life insurance on behalf of their elderly family member.
- Procrastination– Upon retirement, many people are surprised to learn that they cannot keep the life insurance coverage they have through their employer. Not wanting to leave their loved ones without anything, they choose to secure a personal policy.
- Final expenses– While seniors do not usually have financial dependents, they still want to take care of their loved ones. Because the cost of a funeral and burial can be extremely costly, seniors often secure life insurance later in life to cover these expenses.
Which Coverage Options Are Available?
Surprisingly, seniors do have some options when it comes to their life insurance coverage. The most common policy options are term life, guaranteed life, and final expense whole life.
- Term life insurance– When they are in good health, seniors can actually qualify for term life insurance policies. However, there are some stipulations. Seniors are often required to purchase policies worth at least $50,000, with a term length of 10 years. At the end of the 10-year term, most insurance companies will not offer the opportunity to renew the policy. There are virtually no insurance companies willing to offer a 10-year term policy to anyone aged 81 or older.
- Guaranteed universal life insurance– These types of policies are similar to traditional universal life policies, but greater emphasis is placed on the policy’s death benefit and length of coverage rather than accumulated cash value. Most companies offering guaranteed universal life insurance to seniors will require a minimum death benefit of $50,000. These policies can cover policyholders up until the age of 105 or 121 with an additional premium. To qualify for guaranteed universal life insurance, you will need to qualify medically.
- Final expense whole life insurance– This is the most popular life insurance coverage option for seniors. This type of insurance is available to seniors up until the age of 85. Policy limits can range anywhere from $3,000 to $30,000, depending on your age when you apply for coverage. This option is so popular because it does not require a medical examination.
This is what seniors should know about their life insurance options. Need help securing the right life insurance coverage to meet your needs? If so, then contact the experts at Udell Family Insurance. We are ready to get you covered today.