Life insurance plays a crucial role when it comes to protecting the future of your loved ones. When you buy life insurance, whether you are young or old, you always have your dependents in mind, who will need financial support when you are no more. For seniors, however, they may acquire life insurance covers for reasons other than taking care of their loved ones. Whatever your reasons are, it is important to first understand how life assurance works and the best options you can opt for, depending on your needs and circumstances. Read this article for more information.
Factors to Consider When Deciding the Best Life Insurance Cover
Life insurance is the best way of providing for your loved ones when you die. Deciding on the best policy that suits your needs can be
Consider Your Needs and Those of Your Family
In considering your needs and those of your family, you have to count the number of kids you have. You must also consider the needs of your spouse, if you have one, that is. Do you have outstanding debts and loans? Mortgage? Some payment for an existing car? Other expenses your loved ones will pay when you are gone, including taxes, medical bills, and funeral costs? List down all you need to cover, as this will help you determine the type of cover that is right for you and your family. The needs will determine the amount of coverage you will need. It is recommended that you go for a cover that costs 8 or 10 times more than your annual income. Read more at http://blogs.wsj.com/totalreturn/2014/07/25/the-basics-of-buying-life-insurance/.
Cost of Life Insurance
Life insurance prices for seniors differ from one company to another. You need to put your financial situation into account since that is when you will know the type of cover you can afford. It is believed that life insurance gets more expensive the older you get. But don’t worry about this, because life insurance for seniors may cost less than you think.
How Long Do You Need the Coverage?
Life insurance can be term or whole life insurance. Term life insurance lasts for a specific period, 10, 20, or even 30 years. Term insurance is for those who need to be covered for only a specific period, maybe when your kids are schooling. If you need life insurance coverage for as long as you live, then you can opt for whole life assurance.
Consider Naming Your Beneficiary
The life insurance beneficiary is the person(s) who will receive the proceeds of your life insurance policy. It is important to name all the beneficiaries in your policy. Don’t mention a minor because children may not receive the funds. What if you want the policy to benefit your business? In this case, then, you will have to devise a formal plan showing how the proceeds will be distributed. You need to make use of the best option for choosing a beneficiary. Visit https://www.grangeinsurance.com/tips/how-to-choose-life-insurance-beneficiary or talk to an independent insurance agent.
Consider Talking to a Trusted Advisor
Someone with your best interests at heart is what you need when buying life insurance coverage. A trusted advisor will guide and help you navigate through the available options and select the one that suits your needs and circumstances.
Types of Life Insurance for Seniors
Whole Life Insurance
Also known as permanent life insurance, whole life insurance is a type that remains active as long as the premiums are paid. How much is this likely to cost? Well, for healthy male seniors, it may cost between $1,122 and $2,089 per month for $250,000. Females will pay between $934 and $1,801.
Why would you consider whole life insurance over term life insurance?
Well, seniors who opt for whole life insurance do it for the following reasons:
- Funeral And Other Expenses. It is important to keep in mind your funeral and burial costs because if you don’t have enough savings to cover these costs, your family will have to pay for them.
- Medical Expenses. You are more likely to have your medical expenses accumulate if you don’t die suddenly. If you don’t have a plan on how to cover these expenses, it can be difficult for your family to cover them, especially if you had to be admitted to a nursing home. Why leave your family in financial despair after having to settle all the medical bills?
- For Pension Replacement. Your loved ones will need to maintain their standard of living after you are no longer there to care for their needs. It is important to buy enough coverage that can enable your family to cover their daily expenses after you pass away.
Term Life Insurance for Seniors
Term life insurance only pays off the benefit of the policyholder dies within the covered period. With term life insurance policies, there are no additional benefits. Term life insurance exists in two forms; level-term, where the benefits don’t change throughout the term of the policy. Another form of this insurance policy is the decreasing term where the value decreases over the life of the coverage. How much does term life insurance cost? For over 70 years healthy men, the cost ranges from $122 to $435 for term life insurance arranged to cover 10 years. Healthy women can pay $66-$194 for the same period.
Guaranteed Universal Life Insurance for Seniors
This type of life insurance policy allows more freedom for policyholders. Some guaranteed universal life insurance policies allow policyholders to reduce their premiums or even skip payments. You should especially consider this policy if you cannot qualify for term life insurance. You have to undergo an underwriting process, where you will have to answer some questions, including health your condition.
Final Expense/Burial Expense for Seniors
This is a type of whole life insurance that covers funeral and burial costs so that your family won’t have to worry about these expenses. Final or burial life insurance for seniors is common because you don’t have to trouble yourself taking a medical exam. You only need to answer the health questions. It is also very affordable compared to other policies. Cost ranges from $10,000 to $15,000.