Perm Not Term

Avoid term life policies and seek out whole life instruments. Term life insurance may be an appropriate form of coverage for a young married person who must protect his children for a limited time. Term life insurance for the elderly can be a  poor idea because for them it is available only for relatively short periods of time, typically ten years. At the end of the term coverage ceases with no accumulated value. Worse, to obtain an extension of coverage the elderly insured would have to qualify again and undergo a medical exam.

Find A Specialist Agency

Many agents specialize in life insurance for elderly people. They seek out the insurance companies who offer specialized policies for this age bracket, and they become well informed on the details of the coverage offered. Many of the policies available from these specialists will not require medical exams; they are written to allow for the usual bumps and bruises that age brings. These simplified issue policies are affordable and could well be appropriate for you or a loved one who has existing minor health issues.

Deferred Life Is Guaranteed

Deferred life policies might be an option for those with more notable health issues. Called guaranteed issue life insurance for elderly people, these policies use a waiting period rather than medical questionnaires and exams to qualify people for coverage. Typically for two years after purchase of the policy the face value benefit will not be paid in full if the insured dies. You will receive all payments plus agreed interest however. After the initial deferment period the policy would pay the full face amount. This might suit the needs for accumulating the costs of burial for your heirs.

Still Working?

In today’s economy many people of advanced years still work regularly. If you haven’t retired and you are under 85 employers are required to offer insurance coverage. It may not be as attractive as the younger employees receive yet it could be the most cost-effective coverage available to you. Coverage from your employers plan or from other affiliated groups you belong to could well be enough to fulfill your plans after your death.

Not Necessarily Pleasant, But Necessary

Buying life insurance for elderly parents is not a particularly pleasant chore. It requires the acknowledgment that he or she will pass on some day. Since you have read this far we’ll assume that you are highly motivated to solve a financial problem related to their passing.

Can You Insure Another’s Life?

First, a question: is it possible to insure the life of another person? There are laws in place to prevent schemes which would allow someone to profit from the insured death of another. To obtain a policy for your father or mother you’ll need to prove what is called an “Insurable Interest” – that is to say, will you suffer some sort of loss in the event of your parents death.  Generally it is not too difficult for children to prove an insurable interest, and place themselves as beneficiary to a parents’ policy. Burial expenses that may accrue to survivors are one reasonable “insurable interest” item, accrued medical debts could easily be another.

Should You?

Should you take out insurance coverage on your parents? The answer here depends upon your circumstances. If you or your parents have good assets, and particularly cash on hand, then the answer may be no. Somewhat more likely is that ready cash for a modest $10,000 funeral, or its related travel, transportation, and ancillary costs, would be welcomed. If your parents have significant health issues then a larger policy that could be a source of equity to borrow against would be advisable.

Another scenario which might occur is the use of life insurance to balance bequests, say if there were a residence or other indivisible asset, and there were multiple beneficiaries. The cash balance of the policy could equalize things for the heirs.

Term Or Perm?

Which type of insurance term or perm? Generally term insurance for elderly people is ill-advised. The insurable period, or term, of the policies are short, and when they end the insured must undergo new health checks to keep the policy in force. Permanent insurance, or insurance which covers you for your whole life, is more expensive on a monthly basis than term life policies, but it accumulates a “cash value” which can be borrowed against for a variety of expenses such as medical costs. Generally the preferred life insurance for elderly people is whole life for these reasons.

Where Do I Find It?

Where do I find the right policy? Life insurance for the elderly has been designed for easy issue and is available through many outlets including the Internet. While most insurance companies offer burial insurance or final expense insurance the best way forward we believe is to find a specialist. There are a large number of independent insurance agents who specialize in the senior insurance market, and they reside in almost every community.

Term Life Versus Perm Life

There are many different varieties of insurance coverage yet they generally can be divided into only two categories, term life insurance and permanent life insurance. Term insurance for the elderly policies expire in a set number of years, generally one year up to thirty years. Term insurance policies most often are less expensive than permanent life policies, particularly for younger individuals, likes those who need coverage while raising their children. Term life insurance for elderly people however, will have higher premiums than young adults policies, and the period of coverage (the term) for elderly individuals will be notably shorter than those available for younger people. 

When considering term life policies for the elderly, you should note that they will not build cash value (equity) like permanent life policies will do. With insurance policies for the elderly, one is purchasing only a death benefit to be paid to beneficiaries if the insured dies while the policy is in force. Permanent life insurance polices are different, the premiums fund the death expenses or can build equity (cash value) which can be withdraw when one chooses.

Check Renewal Options

One notable feature to examine when you compare term life insurance for elderly policies is whether they have renewal options. Normally with tern insurance when the insured term is complete, and you still want coverage, a new policy will have to be originated. Some term life insurance policies for the elderly offer renewal options where the term can be renewed automatically.  A physical exam, a new medical questionnaire, and likely a raise in premiums will also be required in to renew these policies. 

Additionally, when you compare life insurance for elderly policies, you should ask whether  premiums are fixed or if they adjust during the policy term. Many insurance policies have premiums adjusting every few years, which significantly affect the amount that will need to be paid.

Compare Carefully

Ask about the features we’ve mentioned when you compare and decide upon insurance policies. In some circumstances permanent insurance policies may be more affordable due to equity built up within them. Term life insurance for elderly plans should be examined based on disability waivers of their premiums, their death benefits for accidents, and the acceleration of death benefits. When you shop price is only one factor needed to intelligently decide. Consider carefully your future needs as well as the present and obtain the very best plan for your family’s needs.

No Medical Questions!

Real “guaranteed issue” life insurance policies have no, repeat NO medical questions – send your money and you will receive your insurance policy. Frequently sold as life insurance for elderly applicants, guaranteed issue life policies will cover anyone who applies without a physical exam and there will be no medical questions asked. Don’t confuse these polices with “quick issue” or “simplified issue” individual policies in which insurers ask for medical history yet do not require a physical examination.

There Is A Catch

There are a few catches, however, such as policies designed to provide only for funeral expenses that limit face values to $15,000 or $20,000. Many insurers will only provide policies to clients age 50 to 80. Also payment plans such as once per quarter or twice a year will often cost more.

Also, guaranteed issue policy issuers  do not have medical data to rely on for premium calculation therefore the premium cost tends to become significantly higher. Other policy types, like term insurance, which do use medical information offer lower premiums to clients who prove they are in good health.

High Cost Insurance For Elderly?

High premiums along with relatively low face value or death benefit mean that guaranteed issue insurance policies are not as desire able for healthy people. With some of these policies you could pay a larger amount in premiums than the beneficiary  would receive from the insuring company.

Do the math to see how much you will pay in premiums for your guaranteed issue insurance in ten or fifteen years. It is unlikely that your insurance agent  will mention that you will pay more than your beneficiaries will receive in policy pay-outs.; not many state laws require this  disclosure.

The First Few Years

“Graded Benefits” clauses are the final catch in guaranteed issue policies. These clauses allow insurers to return premiums plus interest for up to three years after purchase rather than paying the death benefit when the insured passes.

Some policies will pay the total face amount during the first three years for  an accidental death. Not all guaranteed issue policies have this feature; those that do define “accidental causes” in a narrow way.

Guaranteed Issue Means Last Resort

Generally if you can obtain life insurance for elderly people by answering a few medical questions or a brief physical exam you will pay much less for a larger death benefit than you would if you chose a guaranteed issues insurance policy.

Only if you’ve applied for several other policies and been rejected because of your health or your age, and, you must provide a cash benefit to your survivors should guaranteed issue life insurance be your last resort.

Our findings are that many, if not most, retired people and elderly have not become free of obligations, and they don’t have savings sufficient to retire their debt and at the same time provide for their final expenses. Many find that they have achieved maturity but additionally have accumulated health problems. Advancing age is enough of a barrier to getting covered yet health issues may add greatly to the difficulty and make it too expensive to be insured at all

Not A Term Life,  A Whole Life

Fortunately, however, some insurance companies have created life insurance for elderly to meet these needs such as  senior insurance, guaranteed life, and final expense life insurance. Each of these is a form of whole life insurance and that is important to you; whole life insurance coverage will remain as long as you keep the policy  in force. Keeping these policies in force means paying the premiums promptly, or having  completely  “paid up ” the premiums. Many of these whole life type policies can be completely paid up in ten or fifteen years with the result that the insured person could be confident of having insurance for the rest of their lives, and not be limited to just a term of a few years.

No Medical Exam Required – Really!

Senior Insurance or Final Expense Life Insurance policies are provided in two different versions, neither one of which requires a physical exam; Simple Issue or Guaranteed Issue  life insurance policies are available in face values from $2,500 up to $50,000. The face value of these policies is relatively low and therefore the lower risk to the insurance companies allows them to relax requirements while still providing economical insurance coverage. Seniors are free to leave the policy benefits to a named beneficiary, often their children or spouse, to provide for burial costs, pay off debts and legal fees, etc. They can even allocate some of the proceeds as an estate.

Simple Issues Are Better

Simple Issue insurance benefits will be in force immediately the policy is issued. They ask some basic health questions yet are designed so that most seniors will qualify. Typically only applicants that have terminal illnesses or who are living in nursing homes are denied coverage on these policies. Relatively small illnesses will not block you from receiving coverage. The coverage is immediate and begins as soon as you are notified you have been accepted.

Guaranteed – No Health Questions At All

No health questions are asked of applicants for Guaranteed Issue insurance! These policies are underwritten by delay of coverage benefits for twenty-four or thirty-six months. If the insured does not live this long all premiums are returned along with interest at specified rates. This is life insurance for elderly individuals with serious health issues, and it is a no-lose option!

If you are older , or if you are concerned  that your parents will need help paying their burial expenses then look into senior life insurance. It will be decidedly  less trouble to pay modest monthly premiums than multiple thousands of dollars for internment, caskets, and other  costs after the individual passes on.