Is Life Insurance necessary for the elderly?

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Is Life Insurance necessary for the elderly?

Saturday, 17 November 2018 | Agencies

Is Life Insurance necessary for the elderly?

Life insurance is no doubt vital to anyone’s life. However, with the rise of many complicated options and conditions, it has become all the dreadful making the right choice while buying one.

Hence, buying a life insurance can indeed be intimidating these days. When considering buying life insurance plan for senior citizens, it can become risky, not to mention, expensive. This is because, as we age, we become fragile. And as we become fragile, we tend to pose a greater risk. Nevertheless, senior citizens still need a life insurance, whatever be the case.

Why senior citizens need life insurance?

The reasons for senior citizens to have a life insurance in place are numerous and varied. However, as with all the other types of insurance, life insurance for the elderly is quite necessary. And there is a reason behind this too. One main purpose life insurance serve is that it provides income. And this income can be used to support the elderly and their family. They not only act as a source of income but as a channel for savings as well.

Also, in case of death of the elderly, the money the insured person’s family receives can be used to pay off any existing debts, loans,and other expenses. Life insurance can be very beneficial. In that, it provides for the family in case of absence of the insured person. If you still have a business to run, then life insurance helps you out there as well.

The possibility of senior citizens getting life insurance

Age is no bar to get life insurance. In fact, there are both terms as well as permanent life insurance policies in place for senior citizens, regardless of their age, although term life insurance has its own set of limitations. For instance, all term insurance has something known as a cut-off period, after which, the policy will no longer be available. But you can still go for permanent life insurance policies, which are not subject to such restrictions.

And then there are cases where some term lengths will no longer be available at certain ages. What this basically means is that a person who has attained 75 years of age can opt for a 10-year term policy, but can’t go for a term policy that is 15 or 20 years in length. There are also those age-limited universal life insurance policies, which are similar in nature to term policies that you can buy. However, just as in the case of term life insurance policies, these too, will have specified time periods and ages up to which the policy would be valid. Like other term insurance policies, these policies differ from one company to another, as well.

When do senior citizens need life insurance and when they do not?

Although life insurance is very much necessary for senior citizens, it is, however, not always necessary. For example, if your funeral is already paid for or you have enough funds for those golden years in your life. Or it could even be that your children are no longer dependent on you, or you have no financial commitments such as debts, loans, etc.

Moreover, most people outlive their need for life insurance and so don’t really need one. For many others, however, buying a life insurance does make sense, seeing as how it pays for your family and its expenses after you have passed away.

Affordable life insurance policies for senior citizens

Senior citizens need life insurance. However, there are certain things you as an elderly person can do, so that you can get life insurance policies at affordable rates. These include maintaining a healthy lifestyle or taking care of your health and shopping for life insurance in a wise manner. To get the best and most affordable policies, you must first evaluate to find the policy the best befits your needs. For this, the face value of the policy becomes a key deciding factor. This is because, the higher is the face value, the more coverage the policy will give.

As far as life insurance policies are concerned, there are plenty to choose from. But only a few of these are regarded as the best. So, let’s look at some of the policies that reap the most benefits.

Term life insurance

Term life insurance is the lowest priced insurance policy that gives the most coverage. Senior citizens, especially those that are healthy can opt for this. This will not only give them adequate but will save them money as well. This type of insurance coverage usually lasts for about 10 to 30 years or and has increments every five years. Additionally, premiums are also guaranteed each year. And as a senior citizen, you can put a cap on the number of years in the term.

Level Term life insurance

In this type of life insurance coverage, it provides a level premium as well as a level death benefit. A simple example of this is that, suppose you have a 10-year term policy in place and a death benefit of 100,000, not only will you be paying an equal amount of premium each year, your beneficiaries will receive 100,000 in case of your death as well. There is a drawback, however. In case the level term policy expires before the insured person’s death, then the beneficiaries will not get anything, as there will be no cash value.

But you can still renew or extend the coverage for another specified number of years. One other aspect of this type of policy is that the older you get, the more expensive the annual rates are likely to be.

Convertible term life insurance

This type of term life insurance allows you to convert term insurance into permanent insurance, in case the policy expires. However, you will need to do this by the age of 70 or before the term expires, whichever comes first.

Guaranteed Universal life insurance

This is a type of permanent life insurance coverage, and as the name suggests, comes with a set of guarantees, which are mostly positive, especially if you’re a senior citizen or elderly person. For example, the premiums for this policy will remain the same during its tenure, which is a point for senior citizens, in that, they can pay for the policy according to their budgets. In other words, there is a specified amount you need to pay , and this amount doesn’t increase in value during the insurance term.

One other advantage of this type of life insurance is that you can set the premiums for a longer period. In fact, it allows you to set premiums as high as up to the age of 105 or more! What’s more? It guarantees death benefits no matter how long you as an insured person live. You may as well opt for the highest so that your chances of outliving the policy are low.

Choosing the right life insurance policies for senior citizens

When it comes to life insurance policies for senior citizens, making an informed choice is not always easy. Nevertheless, if used wisely, life insurance can also act as retirement plans for senior citizens. This is especially helpful when you have such life insurance as universal life, whole life or even variable life as they can be tax-deferred investments. Therefore, to make the right choice, you need to compare different policies side-by-side, so that you will know which insurance is best suited for you and your family.

Comparing life insurance in this manner helps you know the merits and demerits of each one of them. However, you should always keep in mind that the requirements of senior citizens are different from others, and do the comparison accordingly. The problems could be varied, ranging from finding the right policy to funding it to other problems such as issues related to their health. So, assess and understand the unique needs of senior citizens, and the merits and demerits of the policies, and only then will you be truly ready to compare the costs and benefits to find the right policy.

Although it is not required in all cases, life insurance policies for senior citizens should generally come with things such as a highly rated customer service, easy policy management, coverage of medical expenses and lenient medical examination requirements, comprehensive living benefits and clear coverage options among others.

Not all senior citizens need every benefit life insurance offer. Some may require insurance to cover their end-of-life expenses. Others may not need it at all. However, most senior citizens primarily need life insurance to cover costs for their funeral, managing their estate or properties, debts, loans, inheritances and any other financial obligations that they may have.

The sooner you get a life insurance, the better it will be for you and your family. This is because the policies tend to get more expensive as you age. And so, getting an affordable life insurance coverage later in life can be hard, not to mention, disadvantageous. So, try getting a life insurance coverage for yourself and your family as soon as possible.

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