Save for health-related factors, or other unpredictable occurrences, people get closer to death with old age. The risks as defined by insurance companies are very high and, therefore, they charge very high rates of premiums for old age life insurance.
Life insurance for old age, that is, from 60 years and above attracts relatively shorter terms of not more than 15 years. Actually, most insurers offer a term not exceeding 10 years for old age insurance.
Some senior people would want to minimize or eliminate finals expenses that their kin would incur. Others would consider minimizing the tax or debt burden on their heirs in case they pass on.
Still, there are some who may not be thinking about all these problems but are sufficiently philanthropic and would want to donate some money to a charitable course once they pass on. Whatever reason they may have, they have a right to good decision making by comparing the rates of different insurers and choose according to their budget and needs.
Most insurance companies know that they will definitely have to pay if they cover a senior. They also know that health risks increase with old age. This explains why premiums are very high in the insurance packages available for old people.
A Life Insurance Guideline for Old Life
Despite the rates being high, insurers still offer life cover for seniors. Here is some information on life insurance options that would serve as a guideline for those who want to have life cover in their old life.
What are the options?
1. Term Life Insurance
Comparatively, term insurance is the least expensive option of all that are available. The reason why it is seen as ideal for old life insurance is the fact that it expires at the end of the stated period (term) after which it can either be forfeited or renewed.
It can be taken at 65 or even at 70 for a period of 10 or 15 years. If death occurs within this period, the claims are paid for the benefit of the dependants that the senior citizen would have left behind. Any debt left behind will be covered by the insurance claim. This would cushion the heirs from the danger of losing part of the inherited estate to creditors.
It is also the ideal plan for the continued support of education funding, in case the senior one has left college going dependants in need of fees. It can also be used to clear mortgages and even foot the burial costs. This saves the dependants from the agony of spending so much on the funeral that they remain with will very little for their upkeep.
Any remaining balance will go directly to the upkeep of the dependants who will have been left behind.
Term life insurance is, therefore, one of the better options for seniors who want an appropriate policy for people of their age. Even though most insurance covers offered to old people are generally expensive, this is the least expensive option due to its limited term nature.
In case the policyholder gets to outlive the policy, there is always an option to renew it and start all over again.
2. Burial Expenses Insurance (Final Expense Insurance)
As the name suggests, this insurance cover is taken purely to cover funeral expenses when the policyholder dies. This one is for assisting the dependants to foot burial costs and other related expenses after the expiry of life.
The good thing about this insurance is that it leaves the estate intact, with beneficiaries having not spent anything from it to foot costs. This is a good thing since the estate left behind is supposed to maintain the dependants of the deceased.
Dependants are free to determine what to do with the money since the settlement amount could be more than the funeral costs. The remaining balance can be used for any other purpose since it is at the discretion of the appointed beneficiary.
Looking at it this way, it can also be seen as another way of saving for one’s heirs.
Any senior citizen would love to have it that, their people do not face the burden of expensive burial arrangements after they have gone. This is an example of what they could do to alleviate this possibility for them when the time comes.
3. Whole Life Insurance
Unlike term insurance, the whole life insurance scheme goes for a whole lifetime as long as the premiums are paid. On the negative side, it is costly since the premiums are higher compared to the term life insurance.
However, it is perfectly alright for seniors who have big plans for their dependents. This is what it could do:
This insurance policy is also flexible in that it can be used as security to borrow money for major emergencies that require a lot of money. At the time of death of the policyholder, the remaining loan amount is deducted from the settlement claim and the dependants receive the balance.
Though this option is costly, it still has its purpose and a senior who really needs it and has plans for it could find it a viable option.
That said and done, it is advisable for old people to do comparisons before deciding which policy to take. Having considered different life insurance guidelines, you would be in an informed position to pick the best policy for your old life. Many varying factors could inform your choice. Whether it is:
Most insurance policies for seniors will be expensive due to potential high risk, but even then seniors will have to assess their needs and go for the most appropriate option.