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There are variations present within the “life insurance” bracket. The average person will have many options offered to him/her while choosing.
However, term life policy tends to win out.
This leads one to ask, “What is term life insurance?“. This article will have all the answers.
Table of Content
- Defining Term Life Insurance
- Term Life Insurance Rates for Seniors
- Advantages of Term Insurance
- How To Find A Cheap Term Life Policy?
- Frequently Asked Questions (FAQs)
Defining Term Life Insurance
Let’s start with the basics.
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Term life insurance includes a pre-determined coverage period. Premiums are paid based on the decided term, and the policyholder can renew his/her coverage if it runs out before death. This gives the policyholder sufficient flexibility while determining how to position their coverage.
Now, let’s move on to the key features of the term insurance policy.
- Selection of Terms (usually 5, 10, 15, or 20 years)
- Minimum and Maximum Amounts For Coverage
- Policy Is Renewable After Completion Of Term (If Desired)
- Guaranteed Premiums Upon Signing
These are the “staple” features within a term life insurance policy. Various agencies will add extra benefits ranging from lump sums, survivor benefits, partner protection, and more. All of this should be discussed with the company beforehand.
Term Life Insurance Rates for Seniors
All rates below are accumulated based on monthly premiums for a $1,000,000 policy.
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- Age 60: $214.00
- Age 65: $ 373.00
- Age 70: $609.00
- Age 75: $1,241.00
- Age 80: $2,604.00
- Age 85: $3,000+
- Age 90: $3,500+
These figures might seem crazy initially because we have considered a $1M policy which is usually a very high value.
Note: These are estimated figures. No one can give you an accurate number unless you request quotes. To find the lowest price and compare rates online, click here.
Advantages of Term Insurance
What are the benefits of term coverage? With the industry reaching near the 5 trillion (USD) mark, it continues gaining steam, which is a valuable option for seniors.
Before looking at the best term life insurance rates for seniors, it’s essential to consider all advantages.
The plan provides incredible flexibility to seniors.
It starts with the range of terms (i.e., 5, 10, 15, 20 years) and progresses toward different features and premiums.
If a person doesn’t require their life insurance policy after the term finishes, they can move forward without penalization. There are certain policies that return the premium as well.
This provides comfort to the policyholder and unshackles them.
Almost 85% of all Americans agree life insurance is important, but only 62% own a policy under their name. Why is this the case?
It involves affordability.
However, the average plan is costly, leading to hard-hitting premiums a person can’t afford. With term life insurance, paying the premiums is easier because they’re lower than any other option. This provides leeway to a person who wants to budget for the short term.
While seeking cheap term life insurance for the elderly, these policies’ affordability stands out as a critical benefit.
Interestingly, 50% of all life insurance holders believe their coverage isn’t enough. The reason is that it does not have all the essential features they’re looking for.
With a term policy, it’s predictable, and all the essential features are present.
This eliminates all doubt a person might have while making a selection. Finding inexpensive term life insurance rates for seniors is only possible because this is a likely option.
The simplicity of term life insurance is one of its primary benefits. The plan is based on a set term; all premiums remain as determined.
It removes all doubts from the process.
The life insurance policy will remain static until its coverage term runs out, enabling a person to cultivate an appropriate plan.
1) Death Is The Only Way To Collect
It sounds dire, but that’s true with term life insurance policies. The holder has to die within the established coverage period.
The policy can be renewed if they don’t, but life insurance starts again.
This means beneficiaries only get the amount set for one’s policy if death occurs. Since 40% of all American families believe they’d face financial difficulty if the primary wage earner died, this can become a short-term safety net and nothing more.
So, it has advantages, but this can also be a disadvantage.
Term life insurance policies come with a “minimum” and “maximum” amount determined by both parties based on age, health, and personal finances.
This can be restrictive sometimes, especially when hoping for a higher maximum.
How To Find A Cheap Term Life Policy?
To find low-cost term life coverage for the elderly, the goal should be to compare multiple insurance companies to see what they offer. Each insurance company will vary, and these requirements require assessment before deciding.
Moreover, this research should also include whether medical exams are required. To find term life insurance, no medical exam for seniors should be an expectation. But it comes with a drawback when looking for a term policy without a medical exam, as you will be offered a guaranteed acceptance life insurance, one of the most expensive plans out in the market.
Don’t settle for less.
Finally, affordable term life insurance for elderly parents doesn’t come out of thin air. It requires due diligence and a good understanding of all critical features.
This is how one can find cheap term life insurance for seniors and develop the best possible policy.
Frequently Asked Questions (FAQs)
What are the Differences Between Convertible and Renewable Term Insurance?
Convertible: This policy means switching from a term to whole life insurance. Significant differences exist between term and whole; most notably, you can earn interest from premium payments, and the policy may have no set end date until you cash it out.
A convertible policy benefits younger people who want to save up for retirement. Remember that you can adjust the benefit levels when you make the change.
Renewable: Here, you can renew your term policy for another 10, 20, or 30 years depending on your age and the company from which you purchased the life insurance. You can change the benefit level, but there also may be changes to the premium depending on several factors.
You should purchase a renewable policy if you are approaching your senior years and need to change your coverage due to different financial circumstances.
Can You Extend a Term Life Insurance Policy?
If the policy is renewable, then yes, it can be extended. However, there may be additional terms that are added depending on your age, gender, and any notable changes which affect the risk factors involved in setting the premiums.
For example, if you renew a 10-year term policy at the age of 55 and have not had any serious health or lifestyle events, the changes to your policy will be minimal.
However, if you renew at 65, your rates might go significantly upward even if no changes exist. Check with your insurance company to see about expected changes when you renew.
What Happens When Your Term Life Insurance Expires?
If you do not let it go, two things happen when your term insurance expires. Either you purchase a new policy or renew your old one. If you have convertible insurance, you can change it to a whole life insurance policy of equal value.
So, depending on whether you have purchased convertible or renewable, there are some options that you can explore when your term insurance expires.
What Happens to Term Life Policy When You Outlive Its Expiration?
When you approach the end of the term insurance policy, you will need to decide what to do next. Of course, you can always let the policy go and not get a new one, but that is not recommended because the older you get, the more you need life insurance.
Buy New Policy: Many purchase policies that better reflect their living conditions. You can lower the benefits when the kids move out, or you pay off your mortgage.
Convert: If you have a convertible policy, you can change it from term to whole with the same value. This lets you save money and earn interest with your life insurance policy.
Renew: If you have a renewable policy, you can extend your options with a few changes depending on your age, gender, health, and lifestyle. You can change the benefit and premium levels with this policy.