Life insurance is a means of paying for burial expenses and a lifetime of debt after an individual has died. Oftentimes life-insurance is originally purchased when an individual reaches the age of 30 or 40 and has amassed a bit of personal wealth as well as a spouse and a couple of children. The life-insurance is then meant to help support the spouse and children once their income has disappeared after death.
Individuals have the choice of purchasing several different types of insurance, many of which can be cashed out at the age of retirement for a cash value. This, however, leaves the senior citizen without life-insurance to help their family members bury them after death.
Thankfully, it is never too late to purchase life insurance, even for seniors. Usually, an advancing age means insurance premiums will rise drastically but this is not always the case. Insurance companies used to be able to refuse coverage to the elderly but, because laws have changed, many states require insurance companies to cover those over the age of 63.
Policies for individuals over the age of 63 can be short term and will probably only pay a limited death benefit for the first two years. After the first two years of full prices usually payable to the beneficiary at the time of the individual death. In the first two years, most policies will pay the total amount of your monthly payments plus interest, which is called deferred life.
Senior citizens can also purchase accidental death policies which are usually paid in full as soon as the first monthly payment has been received. This is the one exception with a deferred life insurance policy for individuals over the age of 63.
Senior citizens who purchase life-insurance policies often do so after they have cashed out other insurance policies and are looking for something to cover their death benefits and help their spouse pay off any credit cards. A typical deferred life insurance policy may offer as little as $5,000 coverage but can go up to $100,000 depending upon how much of a premium individuals are willing to pay on a monthly basis.
Once you have reached a certain age insurance companies are often not likely to carry you for long-term care insurance. This is an insurance policy which will help to pay for any long-term care necessary for you in either a nursing home or an assisted living facility. Insurance companies are not quick to jump to covering seniors in this instance because, for the most part, those who are looking for long-term care insurance as seniors usually have an idea that they will need it in the future.
Seniors should have enough savings to cover funeral costs may also consider life insurance policies if their spouse will only be receiving a portion of the Social Security benefit income after death. The lack of income can affect the spouse’s standard of living and life-insurance can protect against a decrease standard for the spouse.
Most life insurance companies will also check the credit of the senior who is applying and use that information to factor the premium rates. Since older individuals are more likely to have good credit and a long history of responsibility their insurance premiums may have more positive results than they anticipate.
While younger individuals may look at a whole life or universal life policy to provide not only a death benefit but also cash value as a savings vehicle, seniors may be more apt to purchase the term life policy because the monthly premiums are lower and they provide the death benefits needed.
All life-insurance companies go through a process they call underwriting. During this process, the insurance company takes a very strong look at the applicant’s life, hobbies, health, health history, family history, age, sex, height, weight and even driving records. Because seniors are older and closer to death, life insurance can be more expensive for them and they may not even qualify at all for a standard term life insurance policies.
It is important, however, to realize that getting a life insurance policy as an elderly individual is not completely impossible and also not likely to break the bank. With a little bit of investigation and research, most seniors are able to find a life insurance policy that will meet their needs and for which they will qualify.