The sad truth is that if you are middle-aged, or a senior citizen, then you have missed out on the affordability of life insurance. Life insurance is most affordable for young and healthy applicants. All life insurance applications are decided against exacting lifespan statistics and data compiled by actuaries. A life insurance company’s business model is predicated on receiving as many premium payments from their clients for as long as possible.
Also, an insurance company wants to delay paying out death benefits for as long as possible. Young and healthy life insurance applicants usually live long enough to pay affordable, monthly premiums for decades. So, even when the time comes for an insurance company to pay out death benefits, they can more or less break even based on the amount of previously collected premium payments. The business model logistics of an insurance company is a lot more complicated than that, but that is the gist.
The older that you are, then the more expensive life insurance becomes. Statistically speaking, a 65-year is much closer to the end of their life than a 20-year old. That means that an insurance company may have to pay out death benefits soon after approval, relatively speaking. Or, soon contend with the costs of medical care. Senior citizens are more prone to injury, illness, and disease as they age.
That does not mean that all hope is lost. There are numerous life insurance options available for senior citizens. They are affordable and can serve your needs as you age. Below is some information on the different types of senior life insurance. You can also learn how to compare specfic insurance provides in this post.
Final Expense Insurance
One of your best options is a final expense insurance policy. They are geared towards seniors and can be much more affordable than a traditional life insurance policy. The benefit amount is generally smaller than the traditional policy but seniors usually have fewer people to take care of themselves. You can even get a policy without a medical exam.
As you get older in life your need for a large life insurance policy decreases. When you are younger you will need to ensure you have enough coverage to take care of family members. As your children grow and get careers of their own they will need to rely on you less.
In your senior years, you basically need enough money to pay for your burial costs and final expenses. The average burial cost around $10,000 and you may want to have some additional coverage to take care of any bills you may leave behind.
Final expense insurance is also referred to as burial insurance. It is very affordable and can cost a few dollars a month to about $75 a month depending on your age, and benefit amount. If you only need a policy for $10,000 or less you can usually get one for around $35 per month.
Term Life Insurance
Term life insurance is a temporary form of a permanent life insurance product like whole life insurance. A term life insurance policy stays in force for a predetermined, limited number of years. You can buy a policy for 5-years, 15-years, 20-years, and so on. It is much more affordable than a permanent life insurance policy and offers almost as many benefits.
The only drawback is that is it possible to outlive the policy. If you outlive the policy, you lose all rights to death benefits or the cash value of the policy. You will have to start over and buy a new policy.
Guaranteed Universal Life insurance
This type of life insurance is also known as, “No Lapse,” and, “Secondary Guarantee Life Insurance.” Guaranteed universal life insurance is usually marketed towards senior citizens on TV commercials featuring noted TV personalities. It is a life insurance product that is a kind of hybrid of the best parts of term life and permanent life insurance policies.
With a term life insurance policy, you can only enjoy coverage based on the term coverage of years you apply for. With a guaranteed life insurance policy, you can enjoy coverage based on terms of age. You can guarantee coverage and locked in premium rates until your 80s, 90s, or 100s. For a 65-year old, depending on the issuer, a 20-year guaranteed universal life insurance term can cost $90 to $110 a month.
The cash value of a guaranteed universal life insurance policy always belongs to the insurance company. Depending on the issuer, the cash value can be used as an investment. But if the investment fails, you can lose your coverage.
You Are Not Out of Options
Just because you are a senior citizen does not mean that you are out of options. There are many life insurance options designed to accommodate your age and your needs. It’s best to plan out what your needs are first before committing to a policy. In any case, a life insurance agent will be able to help you with your needs.