Life insurance is often thought of as a financial tool for helping those who have people counting on their income to get through a financial hardship. The funds that are obtained via these policies can be set up such that a young family with children can continue to receive income, and not have to drastically change their current lifestyle.
There are some who may even feel that by the time a person reaches an older stage in his or her lifetime, that holding on to life insurance protection is not necessary. But that is not at all the case. There are, in fact, numerous reasons why seniors should consider owning – and possibly even adding to – their life insurance protection.
Just some of these reasons can include final expenses, the payment of estate taxes, the continuance of retirement income for a surviving spouse, the funding of college education expenses for a grandchild, the funding that is needed to keep a business afloat, and / or to donate to a favorite charity.
When purchasing additional coverage as a senior, one of the biggest questions on the mind of an applicant may be which type of policy is better – term or permanent? While both types of coverage may have some advantages, permanent life insurance is in many cases the better option – particularly that of whole life.
Why Seniors Should Consider a Whole Life Insurance Policy over Term
Whole life is a form of permanent life insurance. It is considered to be the most basic of all types of permanent life. It offers both death benefit protection, as well as a cash value component. And, as its name implies, whole life insurance is intended to cover the insured throughout the whole of the person’s life.
This differs from term life insurance in that term will expire after its set time period, or “term,” which can usually be five years, ten years, 15 years, 20 years, or 30 years. There is also a one-year renewable term life insurance option.
One reason that whole life insurance can be so beneficial for a senior is that, once the individual is approved for coverage, the insured will not need to re-qualify for coverage ever again. Also, the amount of the premium is typically guaranteed – regardless of the insured’s increasing age, as well as whether the insured contracts any adverse health condition in the future. This can be comforting to know that – as long as the policy’s premiums are made – coverage will remain in force.
Another nice benefit that is offered with whole life insurance is the cash value build up. The cash that is inside of a whole life plan is allowed to grow and compound on a tax-deferred basis. This means that there are no taxes due on this gain unless or until the funds are withdrawn from the account. This gain on top of gain can allow the cash to grow more quickly than that of a taxable account. The funds are also guaranteed, so there is no worry about loss of principal – another benefit to seniors who may be risk adverse.
Will You Qualify for Coverage?
For many, qualifying for senior life insurance coverage can be a key concern. This is due in large part to age and / or health issues. Provided that an individual does not have any major health ailments, choosing a traditionally underwritten plan may be the first choice as these premiums tend to be the lowest in most cases.
Traditionally Underwritten Whole Life Insurance Policies
There are many seniors that may be able to qualify for a traditionally underwritten whole life policy. In this case, the individual would need to complete an application for coverage. They would also be required to undergo a medical exam – which consists of submitting a blood and urine sample.
Simplified Issue Whole Life Insurance Plans
A simplified issue whole life insurance plan will not require the senior to undergo the medical examination as a part of the policy approval process. This can help someone in terms of being approved for the coverage – especially if their health may not be the very best.
In addition, in many instances, the application for coverage on a simplified issue policy may ask just a few questions of the applicant. Because of these more “lenient” underwriting requirements, the policy will oftentimes move much more quickly through the underwriting procedure, meaning that a person can have his or her coverage within a matter of just a few days. It also means that the premium that is charged could be higher, however, due to the increased risk that the life insurance company is taking on with the applicant. Many times people will get a simplified issue burial policy that is just enough for final expenses and to close out the estate. This can reduce the monthly cost while still providing enough coverage to take care of the person’s family.
Graded Benefit Whole Life
For those who may have some type of health issue, there are other options for still obtaining life insurance protection. Another of those could be going with a graded benefit policy. Here, for instance, the face amount of the death benefit will begin at a smaller figure during the policy’s early years. Then, over time, the amount of the benefit will increase gradually. With many graded benefit whole life plans, the death benefit will level out by the fifth year of coverage.
Life insurers will offer these types of policies to seniors in order to compensate for the additional risk that the carrier is taking on. For instance, if a senior may have a health issue that causes him or her to pass away immediately after obtaining their coverage, the insurance company will not be required to pay out as much in benefits.
In addition, because the applicants for these plans are usually considered to be more risky to the insurer, the premiums that are charged are oftentimes higher than those of a comparable traditionally underwritten whole life policy.
How to Shop for the Best Whole Life Insurance Policies for Seniors
When shopping for whole life insurance policies for seniors, going to just one single insurance company will not typically be your best option. This is because you will be locked in to only the policies, the underwriting criteria, and the premium quotes that are offered by just that one carrier. Rather, just like any other type of important purchase that you make in your life, it is important to shop around and compare when you buy life insurance – because what is offered through different insurers could be vastly different in terms of the coverage that is available to you, as well as the price that is charged.
What many people do not realize is that even though most life insurers will have at least some type of procedure through which they will rate their applicants for coverage, the factors by which they do so are not all identical. Therefore, should you apply through one insurer and be offered a policy with a Substandard class rating – or worse yet, be declined for coverage – it may still be possible to apply with another carrier and be approved, even with the very same health and personal information on the application.
Rather than running around from one insurer to another in trying to locate the best coverage and premium rates for yourself, the process of shopping for the best whole life policies for seniors can be made much more simple by working with a company or an agency that already has access to multiple insurance carriers. By going about it this way, the company will already have done the shopping for you – and in many instances, the agency that you work with will be able to point you in the right direction as to which of the carriers are more apt to take on applicants who are seniors. This alone can save you a great deal of time – and frustration – throughout the application process.
If you are a senior, and you’re ready to start shopping for whole life insurance coverage, we can help. We work with many of the top life insurance carriers in the industry, and we can assist you with obtaining all of the important information that you need for making an informed purchase decision. We make it easy, as this can be done via your computer, and without having to meet in person with a life insurance agent. In fact, if you’re ready to begin, just simply <Click Here Now> in order to get started.
Should you find that you have any additional questions along the way, please feel free to call. Our experts can assist you with determining the answers that you need so that you feel confident moving forward. We can be reached directly by phone, toll-free, by dialing 877-235-9299.
We understand that the purchase of life insurance may be somewhat overwhelming. You may have some fears as you move forward that your age or health may hold you back. But the good news is that there are many options available today for seniors who wish to obtain life insurance coverage. So, contact us today – we’re here to help.