Senior Life Insurance Coverage Guide For 2020 & Beyond

Updated on November 26, 2021

Contrary to perception, seniors have vast options to choose from when it comes to taking life insurance coverage in the U.S. Insurance companies are increasingly catering to the aging population’s needs despite the increased risk that most of them come with. Likewise, one is always sure to be spoilt for choice when it comes to looking for life insurance coverage for seniors

For seniors, life insurance would make sense if:

·         They have outstanding debt

·         They need supplemental income to cater for a spouse or child with special needs

·         They wish to cover for funeral costs

·         They are high-net-worth individuals and want to cover all taxes once dead

·         Want to leave a fortune or legacy

Senior Life Insurance Options

There are three main types of life insurance coverage for seniors that one can take up to cater to underlying needs.

Term Life Insurance

Term life is the most popular life insurance coverage for seniors as it tends to be affordable and provides coverage for a set number of years. Depending on the agreement that one reaches with the insurance company, coverage can be offered for 10, 20, or 30 years.

A term life insurance policy would be ideal for a senior citizen with outstanding health and looking for a low-cost option. Seniors above 60-years can secure term life policy with ease with good health. The life insurance coverage is best for covering outstanding debt, such as credit card debts and mortgage.

While a $2 million term life insurance policy might seem like a lot of coverage, it might be the right coverage. Such a policy would go a long way in providing financial security for beloved ones or businesses. It would also help settle all financial burdens in addition to covering funeral costs.

Whole Life Insurance

Whole life insurance is a life insurance pact for seniors who wish to accumulate cash value while paying premiums. The pact provides coverage for the entire duration when one is alive with a death benefit payable to death beneficiaries. It tends to be more expensive than term life and requires senior citizens to undergo a medical exam. Some providers like pennlife may not have a medical exam but will still ask questions to assess eligibility for the scheme.

Whole life insurance stands out in part because coverage is always assured as long as one pays premiums. The death benefit is paid to beneficiaries regardless of when one dies. In addition, the cash value that the pact comes with can be used to take out a loan or cash out from the policy.

However, it is important to note that whole life insurance policies can cost a fortune when purchased later. In addition, it takes quite some time for the cash value to build.

Guaranteed Universal Life

It is a blend of the term and whole life insurance. The life insurance pact expires at a designated age, which can be 90, 110, or 121. The cash value or death benefit is only payable upon the set age. It is attentively cheaper than whole life insurance as it comes with a lower monthly premium. It also offers a small cash value in addition to a higher death benefit.

Guaranteed Universal policies require seniors to take the medical exam given the high death benefit always on offer. Likewise, they are ideal for leaving an inheritance to loved ones.

Adding A Rider

Riders are additional options often added on top of life insurance policies to make them effective, depending on underlying needs. The additional options come at an extra cost as the insured can take advantage of them while still alive.

While riders do vary from one insurance company to another, some common benefits include:

Accelerated Death Benefit: The rider often sees the insured receive the full death benefit while still alive when diagnosed with a life-threatening condition. The death benefit would, in this case, be used to cater for medical expenses.

Long Term Care: The rider is often used to cover all costs that may crop up on a senior staying in a nursing home

Bottom Line

When looking for life insurance for seniors, it would be wise to work with a fee-only financial advisor to be sure you are getting the best policy. Shopping around and comparing monthly premiums is also a sure way of getting the best policy per the budget and financial goals.

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