The Best Elderly Life Insurance

Elderly life insurance is becoming more and more affordable as medical technology improves and advances are made that allow people to live longer, healthier lives. In fact, with many couples now having children while in their 40’s and even in their 50’s, the definition of what elderly really is may need to be reestablished. There are many types of elderly life insurance available that specialize in writing policies for specific age groups, and finding the right policy that is also affordable is no longer so far-fetched of an idea.

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Insurance Issues Facing the Elderly

Age is the single most important factor used by life insurance companies to determine the cost of premiums, and therefore age is also the most important issue facing people considering elderly life insurance.  Because age is used to determine the level of risk that a policy holder might die during a given period, it naturally stands to reason that the older a person is, the higher that risk is and so the higher the premium rate will be.

However, age is not the only issue: the health of the individual plays an important role in calculating premiums as well. For instance, a woman who is 65 years old but in average health will pay more in premiums than another woman of the same age who is in excellent health. Some people whose medical records show a history of serious diseases or terminal illnesses may not be insurable at all.

Age limits set on certain life insurance products can also complicate things when seeking elderly life insurance.  Policy holders that outlive the maximum allowable period on their term life policy may experience a dangerous lapse in coverage that could lead to insurability if a serious illness developed during that term.

Insured people over 70 may experience dramatic increases in the amount of the premiums due on their policies.  Furthermore, elderly persons who have unstable or nonexistent credit histories or shaky driving records could see a substantial increase in the premium they will pay.

Why Might a Senior Need Term Life

The most likely time that a senior might need term life insurance is when they are directing resources, assets, and other capital in an effort to self insure by the end of the term life period. Seniors who live on fixed incomes with high debts and bills may simply be unable to afford a whole life policy, and instead purchase a term life policy because the premiums are more affordable. However, it should be noted that as the person ages, the premiums will significantly increase.

Term life insurance should also be purchased by a senior when providing services like child care for a family member, or care for an ill or disabled relative. Term or temporary life insurance can be utilized in this situation to provide benefits that will allow the child care or dependent adult care to continue in the event of the insured’s death. A senior also might need term life to help protect a child or grandchild in college who depends upon them for financial support.

Why Might a Senior Need Whole Life

For those who can qualify for a plan, a senior might consider a whole life policy if they are financially independent and can afford the higher premiums, and wish to be insured for the rest of their life. People who are seeking a safe tax free shelter in which to build cash value and include as part of retirement or estate planning should consider adding a whole life policy to their overall wealth accumulation plan.

A senior might also consider whole life insurance as a means of transferring wealth without losing large portions of it to the government via estate taxes. Furthermore, death benefits are tax free and can be used to offset any estate or other taxes that have accumulated or become due upon death.  Seniors who have recently acquired large sums of money may purchase a single premium whole life policy, which keeps the policy in effect for the life of the insured with only one large initial premium payment made at the beginning of the policy coverage.

What Other Elderly Life Insurance Options are There

Many life insurance companies cater to the elderly and offer specialized plans to help meet the insurance needs of an older population. There are two general types of specialized elderly life insurance, and both are in essence examples of final expense policies, although they operate like whole life policies.  Guaranteed issue policies for seniors feature fixed premiums with death benefits for life.

The policy builds cash value that the insured can borrow against or take withdrawals from. However, the benefits are graded; for instance, some policies only pay a small percentage of the death benefit the first year the policy is active, a higher percentage the next year, with full benefits coming after the third year.

Simple issue life insurance policies for seniors have the valuable feature of instant death benefits from the moment the policy is approved. This type of policy is easy to qualify for and maintain and offers level premiums. However, because guaranteed issue life and simple issue life are forms of final expense insurance, the face value of these policies is often low- just enough to pay for funeral and burial expenses, and some debts, with perhaps a small amount for income protection.

Comparing Premiums and Carriers

Comparing premiums for elderly life insurance is not easy, as there are many different factors to consider. Also, different insurance carriers view risks differently and therefore rate them for premiums in ways that other carriers might not. Some carriers may specialize in writing policies for certain groups, such as smokers or people with histories of hazardous occupations.

There are many policy types, and each has their own distinct advantages and disadvantages; therefore discussing choices and premium comparisons of elderly life insurance with an insurance professional is a sound decision.

There are countless resources available on the internet to assess the strengths and weaknesses of insurance companies, including consumer reviews and Better Business Bureau reports.  Additionally, evaluations and ratings of insurance companies can be found by following this link: Insurance Company Ratings.

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