Seniors who worked for 30+ years and built assets don’t need life insurance often, and they often eliminate it before retirement or once they’ve paid off the house and the kids leave home.
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However, seniors sometimes need more protection, whether to cover their final expenses or debts when they pass. In addition, the need for life insurance may pop up if seniors outlive their expected life or have an unexpected financial emergency.
The problem is life insurance for the elderly can get expensive and hard to qualify for since you’re older and probably not in perfect health.
Fortunately, some insurance companies focus on seniors as high as in their 80s but knowing what to look for to ensure financial safety is crucial.
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What are Senior Life Insurance Companies?
Senior life insurance companies offer life insurance to people in their 60s, 70s, and 80s. This is the age at which most people let their life insurance expire, but some seniors need protection, especially for final expenses.
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These companies have unique policies for applicants who aren’t in perfect health or are beyond the typical age insurance companies issue term life insurance.
Senior life insurance companies offer more than term life insurance policies since most seniors no longer qualify. So instead, they offer permanent life insurance options geared toward seniors to help them make the most of their financial lives.
What Makes a Good Senior Life Insurance Company?
An excellent senior life insurance company will, of course, offer the policies seniors need. For example, term life insurance usually maxes out at age 55 for 30-year policies. Some companies may offer term life insurance to older seniors, but at a shorter term and much higher premiums than most seniors can afford.
Senior life insurance companies will offer policies with no medical exams required that cover their final expenses at affordable premiums. However, senior life policies have unique characteristics, so it’s important to know what to look for.
Consider these critical factors when looking for a life insurance company for seniors.
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Look at the policy options, and ensure they fit your needs. Don’t be pushed into a policy you can’t afford or that doesn’t cover your financial needs. Instead, consider why you need insurance. For example, is it to cover your final expenses, or do you need something more robust to leave a legacy for a loved one you still support?
Always check an insurance company’s financial ratings. You pay them premiums, assuming they’ll pay your death benefit when you die. If you invest in an insurance company with poor financial ratings, you might be giving money, but your beneficiaries won’t see a payout.
First, check ratings on A.M. Best, looking for companies with an A or higher rating. Next, check the Better Business Bureau to see clients’ complaints against the company.
The reason you pay for life insurance is to protect your loved ones. For example, if you buy a final expense policy, your loved ones need the funds to pay for your funeral arrangements and final medical bills. Look for companies that pay out within 24 hours of your beneficiaries making a claim.
Seniors often don’t want to leave their homes to handle their financial issues, and life insurance is no exception. An online or over-the-phone application makes it easy for seniors to apply for insurance from home and get the coverage they need fast.
Types of Life Insurance Offered
When looking for a senior life insurer, you want a company that offers many policies that cater to seniors, including the following.
Guaranteed Issue Life Insurance
Guaranteed issue life insurance doesn’t require a medical exam. Instead, as the name suggests, it’s guaranteed coverage.
The downside is the premiums are higher and the coverage lower. Insurance companies take a significant risk in offering this insurance, so they offer graded benefits to protect themselves. If you die within the first two years of the policy, they’ll pay your beneficiaries only the premiums you paid plus a small percentage, around 10%.
Simplified Issue Life Insurance
Simplified issue life insurance is like a guaranteed issue and doesn’t require a medical exam. However, insurance companies ask questions about your overall health to determine if you have any major health issues, such as heart disease, cancer, or other life-threatening illnesses. If you pass the questionnaire, you will be accepted for simplified life insurance.
Many simplified issue life insurance policies have graded benefits, too, meaning your beneficiaries won’t receive the full death benefit if you die within the first two years.
Final Expense Insurance
Final expense insurance provides enough coverage for your end-of-life expenses, such as your funeral, burial, and final medical expenses. These policies are usually good for no more than $25,000, but give your loved ones peace of mind knowing they can cover your final costs.
Choosing the Right Senior Life Insurance Policy
Choosing the right life insurance policy for a senior citizen is a big decision. Here are some factors to consider:
- Do you have assets saved you will pass down to your loved ones, or do you need a policy that will provide for them?
- Do you have enough money saved for your final expenses, or do you need the policy to cover them?
- Are you still supporting a loved one and need to ensure their financial security upon your passing?
- Are you a high net worth individual who needs the policy to cover your estate taxes?
- Do you want to leave money behind for a charitable organization as your legacy?
Picking the best senior life insurance company is a big decision. Since seniors are often vulnerable, it’s best to have someone help you choose your life insurance policy by researching and discussing your insurance needs.
The right company offers the type of policy and coverage you need at premiums you can afford. They should also be financially secure, have good ratings, and offer a fast claims process.