Inexpensive Life Insurance for Seniors
What is Seniors Life Insurance?
Life insurance for seniors also known as final expense or end of life insurance is offered to enable senior citizens access to some form of coverage. Standard forms of insurance are very hard to obtain for persons over the age of 70. Insurance companies therefore offer various products that tailor to the needs of senior citizens. Most of the time, it’s simply a case of keeping the face value of the policy at a low to moderate level. With many insurance companies offering these products, finding inexpensive life insurance for seniors is not hard, if you know what to look for.
Types of Life Insurance for Seniors
There are several ways to get life insurance in your senior years:
- Buying Burial Insurance
- Setting up a whole life policy earlier on
- Securing a term agreement – rarely recommended for seniors
Burial Life Insurance
This is the most inexpensive life insurance for seniors. It is generally offered to persons between the ages of 40 and 85, however it is recommended more so for people over the age of 50, since general term or whole life insurance is still reasonably attainable prior to that age.
Many companies offer burial insurance cover from as little as $2,500 (with $5,000 to $15,000 being the average). Salespersons will recommend the proceeds to be used for funeral and other end of life expenses such as attorney’s estate fees. However, beneficiaries are generally allowed to use the death benefit for any purpose.
Common features of burial life insurance are that the premiums remain constant and the cash value can be built up but does not decrease. Most seniors will qualify for this type of insurance as many companies offer this policy regardless of a health test. Once you have the policy, it usually continues irrespective of age or whether your health deteriorates, as long as premiums continue to be paid.
Whole Life Insurance for Seniors
Anyone over the age of 18 can purchase whole life insurance. It is intended to stay in place for the whole of your life and so is perfect for seniors because it’s not subject to medical exams and does not expire at any age. It is however more worthwhile if you begin this type of policy early, because it is intended to be a growing investment. Find more information on whole life insurance.
Term Life Insurance for Seniors
This type of insurance is not readily attainable after the age of 70. Most insurance companies do offer term insurance up until the age of 70. However, the cost of obtaining term insurance after your 60s becomes very expensive, even if you’ve purchased it as part of a long term policy. The reason is that seniors have a higher mortality risk.
Tips for buying inexpensive life insurance for seniors
- Unless you’ve set up a whole life insurance policy that has built sufficient value to cover your funeral and end of life costs, seniors are best to purchase a burial life insurance policy. This way, you can ensure that your children aren’t left with paying for your funeral expenses and estate costs.
- There are many brokers now who specialize in senior life insurance. Seek their guidance but also do your homework and calculate the figures. You can easily compare rates and quotes to find inexpensive life insurance for seniors online.
- With any policy, calculate how long it would take to accumulate the benefit in premiums paid. For example, if your premiums are $1,500 per annum on a $10,000 benefit policy, then after 6 years, you would actually be making a loss (ie: you would have paid more than $10,000 to receive only that amount). You need to assess the worth of such a policy against your own circumstances.
- If you’re unsure, seek advice from an accountant or financial planner.
- Always read the terms and be aware of any exclusion. It’s best to have an attorney look over the documentation.