Term Life Insurance: Is it a viable option for seniors?
Author: Cliff Pendell
Term life insurance policy is one of the most common forms of life insurance sold today. This type of coverage is usually purchased by household’s primary wage earner to provide income protection for their family. If the primary earner was to pass away, him or her loved ones would receive a tax-free payment from the insurance company to help them continue paying the bills.
Many people have a misconception that they are too young to start paying for life insurance. On the contrary – financial preparedness is recommended at any age, but is especially recommended if you are still healthy and have a stable income.
Do seniors need term life insurance?
A person who is already at retirement age is less likely to have as many financial obligations as someone younger. Usually as we get older, we have less bills, and less people that rely on us for an income. Nonetheless, purchasing term life insurance is still common at this age, but buying a permanent policy may be a wiser move. A lifetime policy with equivalent amount of coverage might be comparable in cost, especially if you are considering a longer term.
If you need a small amount of coverage and are under the age of 60, buying term life insurance no medical exam coverage may be your best option, especially if you are in good health. Oftentimes, these policies can be purchased over the phone in just a few minutes, and they eliminate the need to take time out of your schedule to meet with a nurse.
Some companies also offer permanent life insurance policies without an exam. If your only reason for buying insurance is to insure a mortgage, it would not make much sense to buy this type of coverage because of its high cost. However, a permanent life insurance policy may be an excellent way to leave a small inheritance to your children or grandchildren. We don’t recommend purchasing term life insurance to leave an inheritance behind because most people outlive their policy.
Aside from leaving an inheritance to your loved ones, the benefits from a permanent life insurance policy can also be used to pay for the costs of your funeral and final expenses, or they can be donated to the charity of your choice.
Is it easy to qualify for term life insurance as a senior?
If you are in average health relative to most people your age, the short answer is yes. After the age of 79, age plays more of a factor than health, and even if you are in great shape, finding a company to insure you can be tough. In addition, the older you get, the higher your premiums are going to be, especially if you have some serious health issues.
The best way to qualify for a term life insurance as a senior is to work with an agency that represents at least a few dozen companies. Most companies that specialize in auto insurance stop offering coverage to people after the age of 65, so you’ll want to consider rates and options from more than one provider.
Alternative options for seniors
Although term life insurance offers the least expensive coverage for seniors, there are other insurance products you might want to consider depending on your needs. For example, if your primary concern is the paying estate taxes you will leave behind or the cost of your final expenses, you should get permanent life insurance instead. A great option for affordable lifetime coverage is guaranteed universal life insurance, because it offers cheaper premiums and more coverage than whole life.
Don’t let your age discourage you from purchasing a life insurance policy. Even into you late 70s, there are still several insurance policy products out there to choose from. A life insurance policy can also help you get the most out of your retirement by maximizing your pension, or allowing you to spend your savings guilt-free, knowing that your final expenses have been taken care of.