Everyone should have some form of life insurance, and this is especially so for seniors. Being prepared for that inevitable day helps give your loved ones some comfort knowing that they will not have a financial burden when you pass.
Choosing the Right Insurance Company
A life insurance company is only good if it pays the death benefits stipulated in the policy. Make sure the company has a good financial rating before purchasing a policy, as the rating reveals whether or not the company is financially solvent. You also want to find out if there are numerous complaints about the company. Every state has a Department of Insurance (or similar office) that will usually indicate complaints and problems with an insurer.Complaints may show that the company is attempting to avoid paying claims or that customer service is poor. Ways to find this information can be found at NerdWallet.
Possibly Adding Benefits
Several life insurance companies with policies for seniors provide benefits not offered by other companies. There is also a difference in the age at which they will issue a policy and when the policy terminates. Some will provide coverage up to the ages of 80 or 85, and a few even until you reach 90. Term life policies are usually not available once you reach 70.
Choosing the right life insurance is an important decision for seniors. tmcphotos/ShutterStock
Be sure to consider optional riders that some companies offer. You need to sign up for them when you apply for the policy. The riders usually cost extra, but some companies offer them for free. Also, not all riders are available in every state. Here are some optional riders you may want to consider.
- Dividend payments: A few companies will offer dividends on their whole life policies. They are not guaranteed, but the money can be used to help pay the premiums.
- Disability Waiver: If the insured becomes disabled, the payments are waived.
- Living Benefit Rider: Some policies will permit you to withdraw some of the cash value under certain circumstances while still alive . This is also called an accelerated death benefit. Withdrawals can be made by people with a terminal illness (12 or 24 months to live), but some policies will also allow withdrawals for critical health conditions. The range of withdrawals will vary, but it is often between 50 to 80 percent of the face value. Some people use the money to pay off remaining bills. Just remember that any withdrawals affect the face value.
- Return-of-Premium rider: This rider enables you to get a refund on some or all of your premiums, usually within a limited time after obtaining the policy.
Study the policies to understand any additional benefits you want or get with your life insurance. Shutterstock
Guaranteed Universal Life
Several companies offer Universal Life or Guaranteed Universal Life policies. Universal Life is a whole life policy with options that you direct.Guaranteed Universal Life is a combination of term and whole life and is less expensive than either of the other choices when you reach your senior years. Instead of having a set term, you can set an expiration date—even when you are 100 or 120. This type of policy offers more coverage than whole life because there is a much slower cash value buildup. It also enables you to make adjustments to the amount of coverage, the length of the policy, and how often you make payments.
Applying for Life Insurance with a Pre-existing Condition
Having some pre-existing health conditions means you will pay higher premiums for your policy. Some companies will not accept you at all. One company that insures people with pre-existing conditions is the AARP (American Association of Retired Persons, a non-profit). New York Life wrote these policies for them and a medical exam is not required. Coverage is limited to $50,000.Comparing Life Insurance Companies
If you look online at sites that review companies offering seniors life insurance, you will quickly notice the that nearly all of them compare less well known companies (some unheard of), which does not make the choice any easier. It is up to you to do some of your own research.When comparing policies between companies, there are two things you need to look at. The first is the age of the company. New companies are not yet financially stable. A second is that they have not been in existence long enough to have a reliable payout record. Because of these potential issues, you may want to stick with well-established companies that have been in business for a long time.
Beware of signing up with companies that offer the lowest rates. Do the research. While low rates may be tempting, remember that when the policy owner dies, the beneficiaries may be counting on that money to bury the person and pay off any remaining medical and other bills. Newer companies may not be around long enough for you to collect the benefit.
Talk with a life insurance broker to choose the right company and policy for you. Yakobchuk Viacheslav/Shutterstock
Applying for a Life Insurance Policy
Although a few companies will let you apply online, you will probably need to talk to an agent in person. The company wants to ensure you understand what you are buying and answer your questions. this may mean the agent will try to sell you a bigger policy than you think you need.One more thing, if you choose to buy term insurance, make sure the policy is convertible when it expires. Otherwise, you may be stuck having to pay higher premiums than you can afford or be left without any life insurance. A convertible policy lets you change a term policy to a permanent one without undergoing medical underwriting again.
The Epoch Times Copyright © 2022 The views and opinions expressed are only those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.
