Life insurance is a financial tool that provides a safety net for individuals and their loved ones in the event of unexpected circumstances. While many people understand the need for life insurance, seniors often face unique challenges when finding coverage that suits their needs. This comprehensive guide explores the benefits of senior life insurance as seen on TV, shedding light on this often misunderstood topic.
Understanding Senior Life Insurance As Seen on TV
What is Senior Life Insurance?
Senior life insurance, also known as final expense or burial insurance, is a specialized type of life insurance designed to cater to the needs of older individuals. It typically offers coverage with lower face values than traditional life insurance policies, making it more affordable and accessible for seniors. This type of insurance is primarily aimed at providing financial protection to cover funeral expenses, medical bills, and other end-of-life costs.
Why Do Seniors Need Life Insurance?
As we age, our responsibilities and financial obligations change. Seniors may find themselves needing life insurance for various reasons:
1. Funeral Expenses: The cost of a funeral can be substantial, ranging from several thousand to tens of thousands of dollars. Life insurance can help alleviate this financial burden on the family.
2. Outstanding Debts: Seniors may still have outstanding debts, such as mortgages, car loans, or credit card debts. Life insurance can help ensure these debts are not passed on to their loved ones.
3. Estate Planning: Life insurance can be used for estate planning, allowing seniors to leave a financial legacy for their beneficiaries.
4. Supplement Retirement Income: Some life insurance policies offer cash value accumulation, allowing seniors to supplement their retirement income if needed.
The Benefits of Senior Life Insurance as Seen on TV
1. Guaranteed Acceptance
One of the significant advantages of senior life insurance is guaranteed acceptance. Unlike traditional life insurance policies that often require medical exams and underwriting, senior life insurance policies typically have simplified underwriting processes. This means that even individuals with pre-existing health conditions or a history of medical issues can still obtain coverage.
Additionally, senior life insurance policies often provide options for accelerated death benefits. This means that if an individual has been diagnosed with a terminal illness, they may be able to access some of the death benefits early to help cover medical expenses or other costs. This can provide much-needed financial support for families during difficult times.
2. Affordable Premiums
Senior life insurance policies often come with affordable premiums, making them more accessible for individuals on fixed incomes. The face values of these policies are typically lower, which helps keep the premiums more affordable. This affordability makes it easier for seniors to secure coverage without straining their budgets.
These policies can provide peace of mind for seniors that their families and loved ones will be cared for in the event of their passing. This can assure seniors that their financial security will continue even after they are gone. Additionally, many of these policies can be customized to meet individual needs, allowing seniors to select the coverage that best fits their situation.
3. No Expiration
Senior life insurance policies are designed to provide coverage for the insured’s entire lifetime as long as the premiums are paid. This means that seniors can have peace of mind knowing their loved ones will receive the benefits whenever they pass away. Unlike term life insurance, which expires after a specified period, senior life insurance offers lifelong protection.
4. Quick Payout
In the event of the insured’s passing, senior life insurance policies often provide quick payouts to beneficiaries. This can be a crucial aspect, especially when funds are needed promptly to cover funeral expenses or other immediate financial needs. The expedited payout process ensures that the financial burden is minimized during a challenging time.
Types of Senior Life Insurance
1. Term Life Insurance
Term life insurance can be a great option for seniors who have a specific time frame in mind for which they need coverage. With term life insurance, you can choose the length of your plan, typically 10, 20, or 30 years. In this type of plan, if the policyholder passes away within the chosen period, the beneficiaries will receive benefits. However, it is important to note that the older you are, the fewer options there may be for term lengths. Additionally, fees may increase as you age. Nonetheless, term life insurance remains a popular choice for those seeking a policy that can provide benefits for their loved ones.
2. Whole Life Insurance
Whole life insurance is a type of permanent life insurance that provides lifelong coverage. It offers a death benefit to beneficiaries upon the insured’s passing and may accumulate cash value over time. Whole life insurance policies often have fixed premiums and provide a combination of insurance protection and a savings component.
Here’s a chart comparing the average rates for final expense insurance, which is a type of whole life insurance, for males and females aged 50 to 70 with a coverage of $35,000. It’s important to note that since this policy is only available to people aged 50 and above when health risks are already higher, the potential rates can increase with each year. Also, whole life insurance costs more than term insurance since it provides coverage for the entire lifetime and the policy has cash value. To learn more about the difference between term and whole life insurance, please read further.
| Age | Coverage amount: $35,000 |
|---|---|
| 50 years old | Male: $125.18|Female: $94.54 |
| 60 years old | Male: $174.17|Female: $135.68 |
| 70 years old | Male: $263.42|Female: $209.16 |
Please note that the following quotes are based on monthly rates for non-tobacco users, both males and females, and are applicable to Fidelity Association’s RAPIDecision Final Expense policies with a face amount of $35,000 as of May 22, 2020. It is important to note that rates and products may vary by state, and all policies are subject to underwriting approval. The RAPIDecision Final Expense policy is available for individuals between the ages of 50 and 85.
3. Final Expense Insurance
Final expense life insurance is a popular choice among seniors because of its affordability, smaller benefit amounts, and its emphasis on covering funeral costs.
Traditional life insurance policies, like term insurance, are typically designed to replace the lost income of a loved one when they pass away. These policies are most important for families during the earlier years when they are working, paying off mortgages, making car payments, and raising children.
However, once retirees have paid off their mortgages and their children have become financially independent, they may not require traditional life insurance policies as much. Instead, what they may need is a way to cover any expenses they leave behind when they pass away.
According to the National Funeral Directors Association, the cost of a funeral can have a median price of over $9,000. Without a way to pay for these expenses, surviving loved ones can experience financial difficulties at a time of intense grief.
Many of us have experienced the loss of a loved one, and recall how difficult it was to cope with the grief, plan a funeral, and deal with the financial responsibilities associated with it. The idea of our spouse or children having to experience the same harrowing circumstance is unfathomable.
Final expense life insurance is a smart and caring solution for seniors who wish to protect their loved ones from the rising funeral costs. This long-term insurance policy is based on certain medical questions and in some cases, medical exams are not required. This compassionate action provides protection for our families from financial burdens, ensuring they are not left with a pile of bills when we pass away.
The Final Expense Insurance Sample Rates for Seniors
Seniors can lock in lower rates by getting coverage earlier as rates increase with age.
Funeral Planning in $10,000 Policy
| Age | Female Monthly Rate | Male Monthly Rate |
|---|---|---|
| 50 | $25 – $40 | $30 – $48 |
| 55 | $28 – $46 | $35 – $55 |
| 60 | $33 – $52 | $43 – $67 |
| 65 | $41 – $64 | $56 – $75 |
| 70 | $53 – $82 | $74 – $93 |
| 75 | $72 – $108 | $100 – $131 |
| 80 | $93 – $152 | $126 – $190 |
*Estimates of rates based on standard health and no tobacco usage
** Funeral Advantage by Lincoln Heritage includes price shopping for funeral items, saving families $1,800 on traditional funerals and $600 on cremations..
The Pros of the Senior Plan Life Insurance program
- The program offers insurance coverage to individuals up to the age of 85
- It provides tax-free coverage of up to $30,000 without any background checks, prescription checks, or medical exams required
- As long as you pay your premiums, your lifetime coverage is guaranteed.
- Only the insured is authorized to cancel the policy
- Policyholders can build their policy’s cash value, which can be borrowed against this amount.
- The pocity rates will never increase.
- No matter what age or how healthy one is, the death benefits will stay the same.
- Payments are generally made within a day.
- You have up to 30 days money back guaranteed.
The Cons of the Senior Plan Life Insurance program
- The Senior Life limited benefit whole life plans are tailored for seniors with varying levels of health. Depending on the state of your health, there may be restrictions in the amount of coverage you can receive. (Keep reading to potentially find out how to get a better offer on coverage if this applies to you).
- There may be a waiting period, during which if you pass away, your beneficiaries will only receive the premiums you paid and not the death benefit payout.
- Immediate benefit for Senior Plan Life Insurance program will provide the full amount of coverage as soon as the policy is approved and issued. However, these plans are typically only available for those who do not have any major health problems.
How to Choose the Right Senior Life Insurance Policy
1. Assess Your Needs
Before choosing a senior life insurance policy, you must assess your needs and determine how much coverage you require. Consider funeral expenses, outstanding debts, and any financial legacy you wish to leave behind. This evaluation will help you choose the appropriate face value for your policy.
2. Compare Quotes from Multiple Insurers
To ensure you get the best coverage at a competitive price, it is advisable to compare quotes from multiple insurers. Each insurance company may have different underwriting guidelines and premium rates. By obtaining quotes from several providers, you can make an informed decision based on the coverage and premiums offered.
3. Read the Fine Print
Carefully review the terms and conditions of the policy before making a final decision. Pay attention to exclusions, limitations, and any additional benefits or riders included with the policy. Understanding the policy thoroughly will help you avoid surprises or misunderstandings in the future.
4. Seek Professional Advice
If you find the process overwhelming or have specific questions, don’t hesitate to seek professional advice. Insurance agents or financial advisors specializing in life insurance can provide guidance tailored to your unique situation. They can help you navigate the complexities of different policies and find the best option to meet your needs.
Senior Life Insurance’s sample rates
Age Over 60
Looking for life insurance when you are over 60 is a different process when compared to those in their 50s. As you reach the age of 60, your life undergoes changes which can affect your perspective towards life insurance. You may have retired, your health may have started to decline, your expenses may have decreased, or you may have started planning to pass your business to your heirs. All of these changes can make you reconsider your current life insurance policy.
For instance, if you currently have term life insurance that is only valid for a specific period, you may consider switching to a universal life insurance policy. This type of policy allows you to lower your death benefit as the policy ages and your circumstances change. If you bought the policy to cover your mortgage, you can decrease the death benefit as your mortgage decreases.
Furthermore, you can earn interest on the accumulating cash value of the policy. The IRS does not take a share of your earnings because the taxes on a universal life insurance policy’s cash value are deferred. Additionally, if you leave the cash value to a beneficiary, they may not have to pay income taxes on it.
If you are a man over 60, you can expect to pay approximately $627 for a universal life insurance policy with a death benefit of $250,000. On the other hand, if you are a woman over 60, you can expect to pay around $546 for the same policy.
Age Over 65
As people work longer nowadays, they may find themselves working beyond the age of 65. If you are in this situation, it is likely that you have people who depend on your income, such as your spouse or a relative whose health is declining. Additionally, individuals over the age of 65 often have some form of debt, and having a life insurance policy can ensure that your loved ones are not left with the burden of paying it off.
When deciding which type of insurance is suitable for you at this age, it is important to consider your life situation and goals. If you have a strict budget but want to guarantee that your loved ones are not left with your debts when you pass away, term life insurance may be the best option for you.
Term life insurance allows you to use a policy for a specific period of time and for a particular purpose. For example, if you have three years left on your car payments, you can obtain term life insurance for three years. This way, if you die before making your final payment, your beneficiaries can use the life insurance policy to pay off the car.
On the other hand, if you do not have any debt but want to leave some money for your loved ones, permanent or whole life insurance may be a better choice. With a whole life insurance policy, you will experience several advantages. Unlike term insurance, a whole life insurance policy covers you for your entire life, as long as you continue to pay your premiums. You do not need to re-qualify at any point. This is an essential benefit for seniors because obtaining a new policy becomes increasingly difficult and expensive as you age, especially as your health deteriorates.
Final expense insurance is an example of a whole life insurance policy that is specifically designed to pay for your funeral expenses and other end-of-life expenses, including outstanding utility bills, medical bills, and other debts. This type of policy offers lower payouts than other insurance policies, but it also has lower premiums.
Final expense policies also build cash value over time, which can be borrowed by the policyholder if they need it. On the other hand, term life insurance policies offer higher coverage amounts but have lower premiums. For instance, a healthy 65-year-old man would pay around $110 for a ten-year $250,000 term policy, while a whole life insurance policy with the same death benefit would cost about $1,122.84 per month. Similarly, a woman’s policy for the same death benefit would cost about $934.82 per month.
Since final expense plans usually have low face amounts, which are typically in the $10,000 range, the monthly premiums are much more affordable, usually around $50 per month.
Age Over 70
Buying life insurance for seniors over 70 is a different experience altogether. People over the age of 70 may not have a lot of debt but may still want to take care of their loved ones. At this stage of life, whole life insurance can be very expensive. Therefore, many 70-year-olds and older purchase final expense insurance. Term insurance companies typically do not offer 70-year-olds 30-year policies, but you can still find a ten-year policy. Alternatively, you can opt for a final expense insurance policy, which is available to you at much more affordable rates.
For instance, once you reach 70, you can expect to pay significantly more for term life insurance. A healthy man with no health conditions or medications will pay roughly $195 a month for a ten-year term life insurance policy with a $250,000 death benefit. In comparison, a woman will pay $148 monthly for the same policy. On the other hand, final expense insurance with a $10,000 death benefit will only cost about $81 a month, and a woman can purchase the same policy for just $61.
Age Over 75
Although it may be more difficult for people over the age of 75 to find suitable insurance options, it is still important to have life insurance regardless of age. This will ensure that your loved ones are not burdened with outstanding medical bills, utility payments, income taxes, or burial expenses. While it is possible to obtain whole life insurance for those over 75, it is important to note that approval is dependent on good health. Those with chronic illnesses, such as diabetes, may not be eligible. However, if approved, the policy will remain in effect until the policyholder’s passing. The cost of a whole life insurance policy for a healthy man over the age of 75 is approximately $2,000 per month, and $1,800 for a woman.
If you are not in good health, there are two other options to consider for insurance over 75. The first is guaranteed universal life insurance, also known as “term for life” or “term to 110” insurance. This type of policy is similar to a whole life insurance policy but does not build cash value. You can select the maximum age, and most policies extend to age 121. With guaranteed universal life insurance, you can qualify even if you have a pre-existing condition or medical conditions. The premium will depend on your health condition, but a man can expect to pay between $300 to $400, and a woman will pay between $250 to $325.
A more affordable option is final expense insurance, which is a no-medical exam life insurance policy issued based on the answers to health questions on the application. For a $10,000 policy, healthy men over the age of 75 will pay approximately $123 per month, while women will pay approximately $101.
Age Over 80
Purchasing life insurance for seniors over 80 can be challenging. The maximum age for term life insurance is 89, which means that those who want insurance over 80 should consider purchasing whole life insurance. However, to qualify for a typical policy, you need to be in good health and pass a medical exam. It is worth noting that since most policies don’t break even for seven to ten years, whole life insurance may not be the best option for you.
A better alternative for insurance over 80 is final expense insurance. This type of policy is perfect for those who don’t have significant debts and are only looking to ensure that they leave enough money for their burial expenses. Men over 80 can expect to pay around $183 for final expense insurance, while women over 80 will pay about $145.
Age Over 85
Buying life insurance when you are over 85 years old may seem complicated, but it is not impossible. It is still recommended that you get life insurance for a few reasons. At that age, your children may be helping with your care, so it makes sense to leave them something to help pay for your final expenses.
One option is to buy a final expense insurance policy, which does not require a medical exam. These types of policies generally have lower death payouts, making them more affordable. Your beneficiaries can use the funds to pay for your funeral or any outstanding debts you may leave behind. Coverage is issued based on answers to health questions on the application.
For men over 85, a $10,000 final expense plan can cost between $183 and $286, while women can buy the policy for approximately $136 to $211.
Age Over 90
Once you reach 90, most insurance companies will not issue you a life insurance policy. You may be able to find a life insurance company who will insure you, but you will need to be prepared to pay a very high premium.
How to avoid the worst life insurance companies for seniors?
Conclusion
Senior life insurance offers numerous benefits and financial security for older individuals and their loved ones. With guaranteed acceptance, affordable premiums, lifelong coverage, and simplified underwriting processes, it provides peace of mind when financial stability matters most. By understanding the types of senior life insurance available and considering individual needs, seniors can make informed decisions to protect themselves and their families.
FAQs (Frequently Asked Questions)
1. Can senior life insurance be purchased without a medical exam?
Yes, many senior life insurance policies do not require a medical exam. These policies typically have simplified underwriting processes that focus on a few basic health-related questions instead.
2. Is senior life insurance more expensive than traditional life insurance?
Not necessarily. life insurance policies for seniors often have lower face values, making them more affordable than traditional life insurance policies. However, the premium rates can vary depending on age, health, and the coverage amount.
3. Can I change my senior life insurance policy if my needs change?
Sometimes, it may be possible to modify a senior life insurance policy to better align with changing needs. However, it is important to consult with your insurance provider or agent to understand the options and any potential limitations.
4. What happens if I miss a premium payment on my senior life insurance policy?
If you miss a premium payment, it is important to contact your insurance provider as soon as possible. Depending on the policy terms, there may be a grace period during which you can pay without losing coverage. It is crucial to clarify the specific terms and consequences with your insurer.
5. Can I name multiple beneficiaries for my senior life insurance policy?
Yes, most senior life insurance policies allow you to name multiple beneficiaries. This can be beneficial if you want to distribute the death benefit among several individuals or organizations per your wishes. However, it is important to specify the percentage or amount each beneficiary should receive clearly.
