While it may be less expensive to purchase a policy at a younger age, buying life insurance for senior citizens is still important. After all, the purpose of life insurance is to help protect your loved ones in the event of your passing, which often becomes more of a concern as you age. This is especially true for seniors still caring for dependents or with liquid assets.
Life insurance is an agreement you make with an insurance provider. In this agreement, you pay monthly premiums in exchange for a benefit amount that will be paid to your named beneficiaries if and when you pass away during the term of the policy. Depending on the type of policy you purchase, the benefit amount could help cover funeral and burial expenses or beneficiaries’ finances.
Do You Need Life Insurance?
- People who are making their highest earnings and saving for retirement.
- Retirees who may lose a significant amount of income when a spouse dies.
- Parents with dependent children.
- Families with large, liquid estates that may be subject to an estate tax (e.g. antiques, cars, houses).
- Owners, partners, and employees of a small business.
No matter your age, if one of these situations is applicable to your current lifestyle, it is highly advisable to purchase a life insurance policy.
Four General Types of Life Insurance
In general, there are four types of life insurance policies that people buy: whole life, universal life, variable life, and term life.
Whole life insurance provides coverage from the moment you purchase the policy until you cancel your policy or pass away. Premiums for whole life are typically fixed, and the policy maintains a cash value, which can help guarantee financial security for your loved ones.
Universal life insurance is the most flexible permanent life policy. Increase your death benefit by passing a medical examination and have your cash value earn a money market rate of interest. After money has accumulated, you have the option to alter your premium payments if there’s enough money in your account to cover the costs.
Variable life insurance policy combines death protection with a savings account and allows you to invest in stocks, bonds, and mutual funds. The risk associated with this policy is if your investments don’t perform well, your cash value and benefit may decrease — though some policies guarantee that your death benefit won’t fall below a minimum level.
Term life insurance is bought to cover a certain amount of time, usually ranging from 5-30 years. Premiums are typically lower than whole life, but your policy term won’t hold cash value if unused by the end of your policy term. Some term life policies hold the same death benefit amount if the insured dies during the term, while others decrease. Term life policies can also be convertible, allowing the insurer to change from a term life policy to a whole life policy.
Find the Right Life Insurance Policy for Senior Citizens
So which life insurance policy is best for senior citizens? You may consider taking a term life insurance policy that can be converted into a permanent policy. Term life insurance is typically more affordable, and the lower amount you pay in premiums can still help maintain your loved ones’ financial security.
No matter which policy option you choose, HealthMarkets Insurance Agency can help you find a policy that suits your needs. Our local, licensed agents can help you determine whether you’ll benefit from a life insurance policy as well as help you purchase the plan you want.
Life insurance for senior citizens doesn’t have to be a challenge. Find a life insurance agent today.