The whole or permanent life insurance comes as a life long benefit or financial security for the client or beneficiary. There are few factors that need to consider in prior of underwriting for a whole life insurance for seniors. You must know exactly how much coverage you need and if the desired benefits are available within this type of insurance policy. Every policy is designed to target a particular group of people and hence it might not be suitable for all the people. To some people the whole life insurance has tons of advantages and the rest thinks that it has more drawbacks than benefits. So, it is the responsibility of the person to match it with own preference and anticipate what potential benefits it contains for him. This type of insurance can be a good choice for the seniors, but it depends on what age and health condition he/she is applying for it. This is actually a complicated idea which draws a lot of others things as well. But if you can understand it and the benefits it offers then this will be a golden goose for you. You can find a lot of whole life insurance quotes for seniors over online which does not cost anything and help to compare between different prices.
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The best thing about whole life insurance is, here you are getting an opportunity to invest money in the market. You should know that the premium of whole life policy has been always few times higher than others and it remains the same through the whole life till you continue the policy. Now at a younger age, the premium should be quite less although you are paying much more. So the additional money you are paying with premiums will be invested to the insurance carrier’s fund. This money will generate a cash value which will be accumulated over the years you keep the policy alive. So, actually you are getting a lump sum which is the addition of face amount and cash value. The face amount is the death benefit that you get due to the contract between you and the insurer and the amount will vary depending on how many times you paid the premiums.
Other Versions of Permanent Life insurance:
There are some other flavors of permanent or whole life insurance which are more or less similar to the original concept. They are universal life insurance, variable life and variable universal insurance. All of them fall into almost the similar concept of permanent life insurance. With universal life insurance, the additional of the premium will be invested by insurers and you will get a guaranteed cash value with death benefits when the policy is ended due to the death of the client. With variable life insurance, you can specify an amount which will be invested by the insurers but of course within a limit. So the opportunity to invest money in different markets such as mutual funds, bonds, stock market is more here with this particular type of insurance. If you know exactly how to invest money in the market and make the best use of it, then this is probably the better one. But this will reduce the face amount which was guaranteed. Sometime the investment can turn down due to deteriorating of the market. So there is a huge risk involved and you got to be a good market researcher to deal with this. The whole life insurance for seniors can be a profitable one if the seniors become aggressive investor. The variable universal life insurance is a blend of universal and variable life insurance.
What are the Advantages and Disadvantages of Permanent or Whole Life Insurance for Seniors:
There are lots of advantages you can obtain from whole life insurance although a right understanding is necessary to understand the concept. The premium that you pay in the first month continues till the end of the policy. It does not matter if the insurance market deteriorates or inflation comes into play, you will be paying the same amount throughout the lifetime. Even if your health becomes worse and you suffer from critical health issues, still there is no chances for the insurers to increase the premium unless they make a review and change their policy rule. The senior does not need to think about their health status or age as it won’t affect the premium. The most alluring feature of whole life insurance is, it generates a cash value. The extra money that you pay beyond premium is invested or saved by the insurance provider. This is how every premium generates a cash value which is accumulated in your savings account. You also get interest rate and eventually it sums up with death benefits. You don’t have to pay any tax against the accumulated cash value.
Another feature is, you can borrow money from this type of insurance policy which is not available with term life insurance. The loan amount must not exceed the cash value. In case, you need some quick cash for children’s education or paying debts, the opportunity of taking a loan will take care of it. If you don’t pay the loan with interest, the amount will be deducted from the face value in the insurance holder’s death event. Even some providers offer dividends. You can get it annually or quarterly depending on the contract. The money you receive as dividends can be withdrawn and used for personal needs. Even you can buy more coverage with the cash value. The decision is totally up to you. The death benefits should be easily used for funeral expenses, paying debt, estate taxes and so on. Even a senior can leave a sufficient amount of legacy for the next generation, spouse or other beneficiary. You can even pay a huge amount at one time and relieve. The policy does not need you to renew as once you start it, it expires on the day when the client dies.
The main disadvantage is higher premium rate. You might have to pay around four to five or even more money as premium than term policies. So, if you don’t have a prearrangement of it, then better think otherwise. When you take a loan from the cash value, an interest is imposed on that amount too. So if you don’t pay back with interest, the total will be deducted from death benefits. Many insurers might not have the feature of accumulating cash value. It is wise to look for another insurance provider in such case.
When Seniors Should Go for Whole Life Insurance and When Not?
This type of life insurance is more preferable when the client is old. For instance, you are finding a senior life insurance at the age of over 70. In this stage both types of insurance cost same. So, if you buy a term policy for 20 years and it ends at the age of 90, then you can’t renew it as 89 is the threshold age for most of the insurance providers who offer senior life insurance. But whole life insurance is life long and ends when the client dies. Plus the client has additional features in the name of cash value, tax advantages, dividends and so on.
The advice to be succeed with whole life insurance for seniors is taking some time to research and find out the best insurance provider in your area. This is equally important to read all the details and features before signing up. If it does not offer those traditional features that usually a whole life insurance offers, then look for others. Always ask for free non-obligated insurance quotes from online.
But if you are young and thinking about a life insurance policy, then it is better to stick with other inexpensive insurance policies which can be availed for as low as $50 per month.
You can apply for whole life insurance quotes for seniors right from us and we assure you to provide the best market deal from most popular insurance providers across the country.