Senior life insurance, in simple terms, is an insurance coverage offered to seniors and acts as a great tool for seniors to plan for their medical expenses and even their funeral expenses to avoid being a burden on anyone. Senior term life insurance, over 70, over 80, etc. allows you one to save every month so that the death benefits can provide for unpaid medical bills and other related expenses.
There are several types of senior life insurance policies that are offered. At one point of time, seniors would find it hard to get insurance coverage given the high risk involved in it for insurance providers. However, modern laws mandate insurance providers to offer insurance protection to seniors. A senior life insurance company can offer several types of insurance policies for seniors over a certain age.
The guaranteed acceptance life insurance is a policy where a senior may or may not be required to undergo a medical exam but is allowed to purchase the policy. However, if they do undergo a medical exam and there are no medical issues reported, then the premium rates for the policy holder would be reasonably low. The death benefit from the insurance policy is full and substantial in case of accidental demise of the policy holder. On the other hand, seniors cannot purchase policies to exploit death benefits. To curb the practice, insurance providers only offer a limited amount as death benefit, when the demise of the policyholder takes place within 2 years of signing the policy due to natural causes. This death benefit is usually the equivalent of premiums paid by the policy holder along with the interest accrued on the premium. The actual insurance coverage comes into full effect after 2 years of purchasing the insurance policy in most cases although the time frame may vary from one policy provider to another.
Senior life insurance can be whole life or single pay insurance as well. In whole life insurance, the insurance protection is available as long as a senior is alive. The premium is fixed and wouldn’t grow with time. The difference between term life and whole life insurance policies is that in case of the former, the premium is lower as it doesn’t include substantial assured death benefits after the maturity age is reached. The death benefits are assured, on the other hand for whole life insurance policy. It is up to the senior to decide which policy to purchase. With advancements in technology and effectiveness of modern day medicines and medical care, seniors can extend their lifespan and hence term life insurance could end up being money lost for nothing. Those who are healthy with no medical issues and hence expected to live longer can therefore go for whole life insurance.
There are plenty of benefits offered by senior life insurance. This is ideal for those who don’t want to create a financial burden for their children or dependents at the time of their death. The death benefits can be substantial and hence take care of all the last rites of the policy holder. It should be noted that the death benefits can be exempt from tax and also from the pressures of creditors to ensure that there are sufficient funds for last rites of a senior citizen. The premium for term life insurance is low too and hence affordable for seniors. Whole life insurance on the other hand can be used to build cash value that can be gifted to the heirs.
A senior life insurance policy like single-pay insurance is an excellent mechanism for senior citizens to pass on a substantial sum of money for their heirs, especially when they have enough money to pay off the entire premium at the start. This is the case when the policyholder is aware that he or she wouldn’t spend the money during their lifetime. The death benefits can be structured in such a way that they are available tax free to the heirs. This could be a profitable deal where a significant amount of money is passed on to the heirs as death benefit, with the value 2 or 3 times the premium paid at the beginning.