How to Choose the Best Seniors Life Insurance
There comes a point in everyone’s life where they have to consider what will happen once they’re gone. Wrestling with the thought of death makes for heavy thinking, but it’s crucial work to ensure that you can die well.
One key part of this process is ensuring that your financial affairs are in order before your passing. You can ensure this by purchasing a life insurance policy to handle your final expenses and care for your family once you’re gone. But if you’re already grey in the temples, it can be hard to choose the best senior life insurance.
Never fear! Our guide to life insurance will show you how to find the right policy for your needs.
Understanding the Two Main Types of Life Insurance
The first thing you should know when looking for the best senior life insurance options is that you have two main types of life insurance that you can choose from. Term life insurance and permanent life insurance. Let’s dig into the differences between the two below:
Term Life Insurance
Term life insurance refers to a policy that’s issued for a specific period of time, usually anywhere from ten to thirty years. You can adjust the term as needed, but once that term expires, so does the policy.
This means that, should you outlive the term of your policy, then pass on, you won’t have any death benefit. However, this policy type offers the cheapest premiums, making it the most affordable type of policy.
Permanent Life Insurance
Permanent life insurance lasts for the duration of the insured’s life. This policy has a cash value, paid into by premiums, which can be borrowed against in emergency circumstances. However, because it carries a cash value, the premiums for this policy can get expensive.
Sadly, this puts a permanent life insurance policy out of the income range of most American seniors, who typically make a little over $40,000 each year.
Simplified Issue Can Be the Best Senior Life Insurance Policy
Both policy types we mentioned above tend to require a medical examination to begin coverage. This can prove problematic for most senior citizens, who tend to have a slew of pre-existing conditions that could lead to a denial of service. For seniors in precarious health situations, what’s called a simplified issue policy can be a lifesaver.
Simplified issue policies don’t require medical examinations for issuance. Purchasing one of these, especially a term life policy, can be the best alternative to having no life insurance as a retiree.
Consider How Much Coverage You Need
Naturally, when you buy any insurance policy, the main question becomes, “How much coverage do I really need?” Some lenses through which you can examine this question include:
How Much Can You Afford in Monthly Premiums?
With seniors on a tight budget, this question becomes the deciding factor in the amount of coverage purchased. If you can’t afford the monthly premiums, then you can’t afford the life insurance policy, no matter how good the death benefit may be for your loved ones.
Do You Have Outstanding Debts to Pay?
If you were to pass away tomorrow, how much debt would need to be repaid? The amounts remaining on any debts your family or children didn’t co-sign may get written off, but they’ll get taken out of your death benefit. This can leave your family or beneficiaries struggling to pay for funeral expenses and other fees.
What Does Your Annual Salary Look Like?
In most resources you’ll find with tips about life insurance, people will recommend that you use your annual salary as a model for your death benefit. The exact amount can vary, but it’s generally recommended that you get a benefit that’s anywhere from 6 to 10 times your current annual salary.
Another way to look at it is, should your family choose to receive monthly payments instead of a lump sum, what amount would it take for them to maintain their current standard of living? If you keep this in mind, you can ensure that you’re giving them enough coverage.
Don’t Forget Burial or Funeral Expenses
One last thing to consider when choosing the amount of coverage you need is your final expenses. It can cost thousands of dollars to die and get cremated or buried in the United States. If you don’t have the right amount of coverage, your loved ones could be left holding the bill once the funeral’s over.
This compounds their grief and stress with financial stressors. Don’t let this happen to you, or them.
What Buying Life Insurance Looks Like Now
The landscape for buying life insurance has changed over the past several decades. What used to be a lengthy, in-person conversation with a lawyer and a financial advisor has gotten streamlined. If you want to purchase a policy, you can do so:
- In-person, with either a life insurance agent or a financial advisor that can contact an agent
- Over the phone, speaking with a representative of a major insurance agency
- Online, though when you buy life insurance online, you must watch for scams
Whichever way you go about it, it’s easier than ever to find the best senior life insurance policy for your needs.
Looking for More Advice About Life Insurance?
Finding the best senior life insurance can be a difficult process to navigate. From finding the right amount of coverage, choosing the right company, and finding the right type of life insurance, there are many factors to consider. We hope that our guide to life insurance gave you some clarity.
If you’d like more advice about life insurance or other financial concerns, then visit our blog. We update each day with more helpful finance content like this!