There are a lot of pensioners that never invested in life insurance. Each had their reasons for not doing so. Then there are many that once they entered their pension years may now have regrets. This leads them to try to determine if there is life insurance available to them? If so how much and what is the value of it? Also, what is the purpose of wanting this now?
Do You Need Life Insurance in Retirement?
This is probably the most common question that is asked both before retirement and during it. The answer is not a simple one.
The retirement years should be financially stable for seniors. At least this was the perception at one time. Some may have savings. Others may have made investments to pad their golden years. Others may assume they will not have any major expenses, and they will be debt free. So even if they only had their pensions to live on that would be sufficient. Unfortunately, that has become the old way of thinking.
Many seniors are now entering their retirement years with some debt. The basic cost of living has gone up, but the average pension is not on par with this. They do not have the extra funds to pay off their debt. It means that this may be debt that their loved ones are going to have to commit to. This is a worry for many seniors.
What is the Insurance for Old People?
There are variations in life insurance plans for those at pre-retirement age. There are some for those in their retirement years. They too can be confusing just like any insurance can be. But, it is important that anyone buying insurance understands it. That they know what they are getting for what they are paying for.
Senior Life Insurance Plans
One of the major differences with senior life insurance plans is the age factor. It plays an important role. In what is available to them. The big difference will be in the cost of premiums based on age. There are also choices to be made. Between term life insurance coverage and permanent life insurance. In addition to this, there will be certain metrics that each insurance company will use. As it pertains to each individual. The insurance premiums will climb significantly as age increases.
So there are three important factors that have to be taken into account.
The age of the individual
Premiums will normally change in five-year increments for the individual. Meaning that the premiums stated at age sixty will increase significantly. When the insured becomes sixty-five.
The amount of coverage they want
Coverage can range quite dramatically for senior life insurance. There are policies that will provide coverage for as little as $5,000 up to $100,000 and perhaps more. Deciding on how much coverage one wants depends on their specific circumstances. Also, the purpose of the insurance. Some individuals want enough money to cover their funeral expenses.
Others want to make sure there is enough coverage to cover their debts. Some debts may be expunged upon death. But this again will depend on the individual’s circumstances. Many senior couples have joint credit cards. One of the cardholders may die. Then the responsibility to assume the debt may fall on the shoulders of the surviving spouse. In these cases, one may want to take out enough life insurance to cover these debts. One should also check to see if there is any life insurance coverage for this. That applies to their credit cards.
The pre-existing health condition
One of the biggest concerns is pre-existing health conditions. These are a big factor for anyone obtaining life insurance. But, more of a concern for seniors. Many seniors have pre-existing conditions. Ones that could affect their chances of getting life insurance. Or, that it may create a price on premiums that are unaffordable. There are more insurance companies now offering what they call no medical insurance. In fact, there may even be companies that are offering guaranteed life insurance. For those between the ages of 40 to 75. Or similar packages. This sounds good. It is because some are claiming that no medical is needed and there are no health questions. In other words, you cannot be turned down. There are some conditions for example:
a) It is guaranteed that one will be accepted for coverage. But, only after they have made their first initial payment on their premium. The insurance shopper has to question this further. Meaning does the premium payment consist of the first year’s payment? Or does it mean the first installment payment?
b) Look at the fine print. It will usually tell you that the policy will not be paid out in the first two years of coverage. This means that if the insured were to die within two years of the date the policy came into effect, the policy would not be paid out.
c) Although no medical questions are asked, most likely the company will ask if the individual is a smoker. If the answer is yes, it is likely going to affect the cost of the premiums.
Each insurance company is different in their exceptions and conditions. This is just one example.
Seniors Need to Insurance Shop Carefully
Anxiety and worry can cause seniors to make a mistake when shopping for their insurance. Not because the Insurance companies are out to take advantage of them. It is true that Insurance companies are in business to make money. But they stand behind offering good products that can serve important purposes. The insurance companies may not be aware of why a senior wants to buy insurance. That could be the problem. They may not be buying the right insurance for the purposes that they want it for. For example, if they are buying insurance to cover the debt, they may be buying more than what is necessary.
By shopping carefully, it means knowing what type of insurance is needed and how much. Then do a comparison with the quotes they get. They have to know whether they are looking at term insurance. This means when they are doing quotes then they have to be related to the same type of insurance. They also have to understand how the premiums work. Depending on the type of life insurance there will be increases in premiums. Throughout the years.
Ideally, seniors should rely on someone knowledgeable. To assist them with their insurance shopping. Not because of their age. But, because insurance for seniors can be complicated.