Life insurance isn’t something that a lot of people like to think about, but it is valuable to have. When a person passes away, a life insurance policy will present beneficiaries with a death benefit. This benefit can be used to cover funeral costs, medical bills, or other types of expenses. Unfortunately, a lot of people put off thinking about life insurance until it seems like it is too late. Many people don’t give much thought to life insurance until they are over the age of 65 or 70. If this has happened to you, you should know that you don’t need to be concerned. It isn’t too late for you to sign up for a life insurance policy. If you are over the age of 70 and are wondering how to choose the best life insurance policy to protect your loved ones, do not despair. We encourage you to read this entire FAQ so that you have all of the necessary knowledge to make a smart purchasing decision.
Death will smile on all of us one day; all we can hope to do is have the peace of mind to smile back. While death is never an encouraging subject, knowing that one’s family will be cared for in the event of death is a great comfort.
What follows is a summary of the most frequently asked questions on obtaining insurance policies for seniors. Review them to understand how you can best take advantage of a life insurance policy.
Is A Term Policy The Best Option?
Many senior citizens wind up purchasing term life insurance policies rather than permanent policies. In most cases, term policies are easier to obtain than permanent policies, especially if the person applying is over the age of 70.
With that said, there are Guaranteed Universal Life, or GUL policies available to most seniors. As a matter of fact, these types of policies may actually be more affordable than any of the alternatives.
You shouldn’t assume that you have to limit yourself to a certain type of life insurance. There are a wide number of policies available, with an array of terms and death benefit amounts. You should be able to find something that compliments your unique circumstances.
Do I Need To Have A Medical Exam?
Most insurance providers require people to obtain a medical exam before they provide any kind of coverage. A medical exam allows to provider to evaluate how much of a risk they are taking on.
With that said, a medical exam isn’t necessarily a requirement. There are a number of providers that will allow you to obtain a small amount of coverage without undergoing any kind of exam.
If you sign on for a policy like this, you will be asked to fill out a questionnaire about your health. The insurance company will decide whether or not to cover you — and how much coverage they should provide — based on the answers that you give.
What About Burial Insurance?
Some senior citizens aren’t interested in a full insurance policy; they are simply interested in obtaining burial insurance. This type of insurance is designed to cover the costs of a funeral and other burial expenses. The premiums for these sorts of policies is typically very low.
In the majority of cases, life insurance policies are designed to provide for the people that you are leaving behind. If you don’t have any dependents, you may not be interested in a larger policy. A burial policy may provide you with more than enough coverage.
In addition to burial insurance, you may want to look at funeral pre-payment. You can ensure that you won’t leave any expenses behind when you pass away.
Burial insurance is sometimes referred to as simplified issue insurance. This is because these policies are simple to obtain and don’t require a medical exam.
What If I Have A Pre-Existing Condition?
If you have a pre-existing condition, you will need to inform the insurance company of this condition. Even if you don’t have to submit to a medical exam, your insurance company has a right to know important information about your health.
With that said, you should know that a pre-existing condition won’t keep you from getting insurance. There are even insurance policies that are specifically designed for people with health conditions. Some policies even have something called an accelerated death benefit. This allows people with terminal illnesses to leave money behind for their family.
How Can I Find The Best Policy?
The best policy is the one that will provide you with what you need. Different people will want different things when it comes to life insurance; find a policy that is well suited to you.
Think about what your priorities are. Decide how much you are willing to pay, and how much coverage you want to obtain.
You should also think about what you are willing to do. Are you willing to submit to a medical exam, or would you prefer to avoid an exam? Do you want long-term coverage, or would you be comfortable with coverage in the short term?
There are many choices when it comes to insurance policies, and there are a number of insurance companies out there. Gather more information so that you can sign up for a policy that you will be comfortable with. You should find something satisfactory.
What Should I Look For In An Insurance Company?
There are a number of factors you will want to consider when evaluating insurance companies. Above all else, you will want to make sure that the company you work with is financially stable. You should make sure that they will be able to fully pay out any benefits that are owed.
If you want more information about the financial stability of an insurance company, you should pay attention to how long they have been in business. You should also look at how the company has been rated by various independent agencies.
Another thing you will want to look for is nationwide availability. Even if you plan on staying put, signing on for a policy that is effective nationwide is a smart choice. There are many insurance companies that write policies in at least 40 states; try to work with one of them.
What Kind Of Death Benefits Should I Look For?
There are a lot of variations when it comes to the amount of death benefits that a policy pays out. In recent years, policies with a smaller benefit have grown in popularity. Not everyone is interested in leaving a large amount of money behind.
Talk to an insurance agent about your options regarding death benefits. They should be able to help you to determine the appropriate amount of coverage.
How Long Will The Policy Cover Me?
If you sign up for term life insurance, your policy will cover you for a limited amount of time. If you buy a 5 year policy, then you will have 5 years of coverage. The same is true for 10 year policies, as well as 15 year policies.
If you buy a permanent policy, that policy may still have an expiration date. With that said, the expiration date probably isn’t something that you will have to worry about. In many cases, an insurance policy provides benefits until a person is 120 years of age.
How Old Is Too Old?
Many senior citizens worry that it is too late for them to obtain life insurance. While it is true that some doors will close as you grow older, there will still be options for you.
If you are over the age of 65, but under the age of 70, it should be fairly easy for you to find a policy. As long as you are under the age of 80, you still should have a number of options. The average lifespan is increasing, and more and more insurance policies are willing to insure people that are well past retirement age.
How Much Will I Be Paying?
Your payments will be determined by a number of factors. The size of the benefits your policy provides will have an impact on the costs, as will your health. People in poor health are a bigger risk for insurance companies, which means that they will have to pay more.
The type of policy you sign up for will also impact cost. As mentioned above, term life insurance tends to be the most affordable option.
If you are looking for life insurance, you should spend some time shopping around. Work with an insurance agent. They will help you to find a policy that works with your budget.
What Else Should I Know?
When you sign up for a new life insurance policy, that policy may have some sort of waiting period attached to it. For example, it is common to see policies with a two-year waiting period.
If a person signs up for a life insurance policy, then passes away shortly after, the insurance company may not need to pay out the benefit immediately. If the person dies within the waiting period, the insurance company can investigate the death and determine what the payout should be.
Make sure you are familiar with the waiting period with the policy that you are signing on for. Try to find a policy that you are completely comfortable with. Life insurance is always an option, regardless of your age. If you are interested in leaving your family money when you pass away, life insurance is something you will want to sign up for. Life insurance for senior citizens doesn’t have to be expensive, nor is it overly difficult to obtain. There are more options for consumers today than there ever were in the past
Is it necessary for those holding existing life insurance policies shop around?
There is a good chance that by cautious comparison and switching, also known as re-broking, a better price can be found. It is also important to consider that the age of the policyholder will play an important role in calculating the total premiums.
Because there is less of a risk when covering a younger person, the premiums paid by older people are generally much higher. If you have been diagnosed with a serious disease you may find it even harder to find a suitable plan.
Is it possible to hold multiple life insurance policies?
It is possible to hold several life insurance policies and this may actually be a good idea in some situations. For example, if you have an existing policy but feel you need more coverage, taking out an additional policy can address this very situation.
Is life assurance the same as life insurance?
Not exactly, the two systems are often used to describe the same thing, but actually the two systems function very differently.
What is “Term” life insurance?
Term life insurance refers to the type of policy that will pay the beneficiaries of a policy a lump payout if the insured dies within the period or ‘term’ the policy is in effect.What is Whole Life Insurance?
Whole life insurance is the a coverage that will pay beneficiaries a specified amount upon the death of the insured. Because it is ‘whole life’ there are no terms or periods that terminate the arrangement. This type of policy can also be significantly more expensive.
What is over-50s lifelong protection?
Insurance policies for those over 50, commonly referred to as over-50’s Protection, is a special form of insurance policy offered to those within the ages of 50 – 80. It offers immediate acceptance without the need for a medical checkup.
Are over-50s policies the only options for older people?
Not necessarily; it is important to look over the full range of options available as some are often more appropriate than others.
What is mortgage life insurance?
The mortgage insurance policy operates in the very same way as the standard life insurance. Rather than pay a sum to beneficiaries, the mortgage policy works to settle remaining mortgage debt in the event of the insured dying before it is entirely paid off.
What is convertible term insurance?
With this type of term life insurance, the policy can be changed to an endowment or whole life policy at the end of the term without having to present a new medical examination.
What is decreasing term insurance?
This type of term life insurance will feature coverage that decrease over time, often in relation to a decreasing mortgage debt.
What is level term insurance?
In this form of term life insurance the amount of coverage remains unchanged throughout the policy term
What is critical illness coverage?
Coverage for critical illness will pay a sum of cash if the insured is diagnosed with a disease listed in your policy, this can be an integrated feature of a larger policy of bough as a single product.
What is terminal illness coverage?
Typically a part of a standard policy, Terminal illness coverage pays a sum of cash if the insured should become diagnosed with a terminal condition. It is important to check your terms and conditions to make sure this is a feature of your policy.
How do joint policies work?
A joint policy can be taken out by partners and are usually a more cost effective approach to insurance policy prices. These policies will only pay out once. The last to die is not insured but becomes the beneficiary of the insured partner. This is a generally good idea for couple with no dependents.
If I already have insurance through my employer, do I need more?
Many employers will offer a life insurance, or more aptly called ‘death in service’ coverage. The important things to consider are: a. if the amount of coverage will properly provide for your beneficiaries b. You will not be covered in the event that you leave your work.
What is Family Income Benefit?
This type of insurance promises to cover the regular monthly income of the family’s breadwinner in the event of their untimely death; these are not the most common policy offered, but have many cost effective advantages.
Can existing medical conditions affect my policy?
This can be very different from one insurance provider to another; typically if you do present a medical condition, you will find it harder to find insurance or face higher r premiums as a result. It is possible to find a policy does not include stipulations about the medical condition the insured faces.
What is waiver of premium?
Waiver of premiums is a feature that allows you to keep up with monthly payments even in the event that you fall sick and are not able to work. Payments will be made in your stead until you die, until you have reached a specific age or until you are better and can resume work and regular premiums payments.
Is it important to consider funerals plans?
There are policies that come with provisions to cover funeral expenses. It would be good idea to consider all the pros and cons before signing on with this policy type. If you do plan to cover the costs of a funeral through your insurance provider, consider that the payout for this arrangement can take especially long in arriving.
How does bereavement counseling cover work?
When the insured dies the beneficiaries of the policy are often entitled to bereavement counseling and even probate help from online sources. Check with your provider to see if these are included in your policy or if you must pay extra for it.
Are life insurance payouts taxed?
While life insurance payouts are not supposed to be liable for taxation, it is possible that the beneficiaries of your policy are liable to pay insurance tax on receiving this cash. It would be a good idea to bring this up to your insurance provider to avoid this.
What are the benefits of writing life insurance in trust?
While this is not the best idea for everyone, writing life insurance in trust can have specific advantages. This can have benefits in avoiding taxation, helping to define how this cash is used or even speeding up the payment process by bypassing the probate stages.
How does one write life insurance in trust?
When you are taking out a insurance policy you will ask your provider to give you the option of writing in trust, this shou8ld be free. Existing policies can also be rewritten in trust, but it is best to seek legal counsel when trying this.
Can writing a will help with life insurance?
Much in the same way that writing in trust can mean you will pay significantly less in inheritance taxes, writing your policy in a will makes it more valuable for the beneficiaries and can even lower your premiums in the process.
Who benefits from my life insurance?
When you draw up you policy, your provider will ask you to name a beneficiary or beneficiaries who will be paid coverage upon the fulfillment of the policy. This can be one two or more people. You will also be able to set the amounts each beneficiary receives.
Do women pay less for life insurance?
Not anymore, this was a true point until 2012, when policies were changed and this factor can no longer be entered into the equation.
Can I modify the beneficiaries of my policy by revealing changes in my will?
Once you have purchased a policy, the details laid out within are controlled by the plan itself. It doesn’t fall into the regular estates. If you wish to change the beneficiaries to your policy, this must be done through the insurance providers providing the policy.
Are their time restrictions for making insurance claims?
Typically there are no such restrictions or time constraints; nevertheless, you should thoroughly review the terms and conditions section to make sure none have or can be imposed.
What is a ‘Life Table’?
Life tables or actuaries’ tables are what an actuary uses to show the probability an insured person will die before their next birthday. This is used to ascertain the risk level of the insured and place the most appropriate premium for them. Age, health levels and history of family illness are the most pressing factors in a life table.