Insurance Types
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Life Insurance for Seniors
Term or Whole, Immediate or Graded, What does It All Mean?
When looking for life insurance senior citizens should use caution. The internet abounds with fraudulent offers of insurance that is a waste of money. You also need to know what type of insurance you want to buy. Most people in this age bracket want to purchase insurance to cover their final expenses. This means the policy will not be huge but getting approved is painful at time. Most insurance companies restrict policies to people of a certain age or in good health. Many seniors do not think of these things when they are younger and healthy. It becomes imperative when they are older and not so healthy. What do seniors need to know when they are looking for life insurance?
In their search for life insurance, senior citizens need to decide between term life and whole life insurance. Most financial advisors would recommend whole life policies if you want to cover funeral expenses. Term life policies are good for a certain period. However, a couple of things could happen. The first is getting sick enough not to pay the premiums. When the premiums lapse, the insurance companies will cancel the policy. The second thing to worry about is living long enough that the policy's life span ends. That would be money down the drain. Whole life insurance, however, is permanent and does not lapse.
Another decision for life insurance senior citizens will have to face is whether to get immediate benefits or graded benefits. When issuing life insurance policies, the insurance companies are taking a risk. They want to make money while you want coverage. If you are ill or much older than retirement age, the insurance companies will balance their risk. They will do it one of two ways, or a combination of both. The first option is charging you higher premiums. The second option is putting a waiting period in the policy. They would not pay the full balance of the death benefit if you died during the waiting period.
In their hunt for life insurance, senior citizens face one more decision. How much coverage should they purchase? Most funerals today cost around $8,000 to $10,000. The price is higher in some areas of the country. You want enough insurance to cover the costs and a bit extra for inflation or extra expenses. The choice is completely up to you and your circumstances. However, leaving without some coverage will put your family into more grief at your passing.