Purchasing life insurance is an important decision at any adult age. The decision becomes even more important for elderly people looking to protect and assist the people they love through senior life insurance policies. Life insurance is primarily designed to make payouts after your death to designated beneficiaries. Certain policies offer additional protections, including money for long-term care and coverage for short-term debts.
Cheap life insurance for seniors is available on the market today. Premium prices vary based on your exact age, medical conditions and multiple other aspects. Read ahead for valuable information about choosing the best life insurance policy as a senior and protecting the ones you love today.
Senior Citizen Life Insurance – What You Need to Know
Life insurance policies vary in nature. Most primarily pay death benefits to designated beneficiaries in the event of your death. Your death might occur naturally or accidentally. It might also occur by homicide or suicide. Payout proceedings commence once your death is verified and a death certificate is presented to and validated by your insurer.
Term Life Insurance for Seniors
Life insurance has multiple categories, but the two main types are term life and whole life. Term life insurance for seniors includes expiration dates. The term of the policy lasts between the date it is enacted and a prespecified later date, upon which it expires.
Term life policies last between one and thirty years in length. Death benefits are only paid if you die within the term dates and no premiums are refunded. Death benefits range between approximately $50,000 and many millions of dollars depending on premiums paid and policy stipulations. Term life insurance plans are further broken down into three additional commonly-purchased categories:
- Annually renewable.
- Decreasing term.
Level-premium term life insurance guarantees your premium will not go up for the full amount of time your policy remains active. Annually renewable term life insurance renews on consecutive years up to a predetermined number of maximum years.
Each renewal increases your premium. These types of policies best serve short-term needs when the sudden unexpected debt of a significant amount is incurred.
Decreasing term life insurance is often used to cover non-emergency debts. For example, paying your mortgage is essential for the survival and quality of life for your family. Decreasing term policy covers the price of your mortgage and includes decreasing premiums and payout benefits as your mortgage debt is reduced.
Whole Life Insurance for Elderly Citizens
Whole life insurance for elderly parents or you differ from term life plans primarily because whole life policies have no expiration dates. Whole life insurance also includes considerably more plan options than term life policies.
The most commonly whole life plans guarantee how much the cash value of the policy increases as time passes. Universal life insurance charges are flexible albeit increased premiums as you age. Group senior life insurance plans are provided by employers as either term or whole life policies.
These policies are perhaps the least common type of life insurance for the elderly because most seniors are retired or close to retirement age. Group life insurance policies also have zero cash value.
Whole life insurance plans have two additional specialized categories. Simplified issue life insurance requires only a minimum amount of health examinations for approval. Guaranteed issue life insurance policies are approved regardless of your health or physical condition. Both simplified and guaranteed issue policies are more expensive because they involve more risk for the insurance company. Both policies also have zero cash value.
Senior Care Final Expense Insurance
Funerals during 2023 cost between $8,500 and $13,000+ on average. According to the U.S. Bureau of Labor Statistics, these prices increased by 227.1 percent over the last thirty years. Over the same time period, all non-funeral items collectively increased in price by 123.4 percent.
Senior care final expense insurance helps remove the financial burden of paying for your funeral from the shoulders of your loved ones. This type of policy is a specialized variation of whole life insurance. Expenses covered include the cost of your funeral and burial in addition to qualified medical expenses remaining after your death.
Final expense insurance policies for seniors are issued between a $2,000 and $5,000 minimum on average. Some policies are written as low as $1,000 depending on the provider. Most seniors choose plans written at $10,000 or more, however, and pay approximately $50/mo in premiums.
Critical Illness Coverage
Some life insurance policies also cover expenses due to critical illnesses. Critical illness life insurance pays for costs associated with surviving heart attacks, strokes, cancer, coronary bypasses, organ transplants and multiple sclerosis (MS).
This type of insurance is also useful for covering expenses your regular health insurance will not. For example, payouts are usable for transportation and childcare provided they are related to your critical illness. Monthly/grocery bills, outstanding debts, college tuition and general household expenses are also sometimes covered.
Lump sums are commonly paid when policies are cashed in. Critical illness coverage limits range from several thousand dollars to $100,000 and more depending on your policy and needs.
Premium prices for critical illness life insurance policies also vary greatly. The sex and health of the policyholder factor into costs. Your age, health status and family medical history also affect the price of premiums.
Critical illness life insurance is important life insurance for elderly parents to have in normal times but especially during a global pandemic. Consult with your insurance provider to understand all terms and conditions related to COVID-19 and associated issues/expenses. Each company sets its policies differently regarding the virus and it is important to know your coverage limitations and options today.
Find Cheap Life Insurance for Seniors in 2023
When shopping for life insurance over 50 quotes vary based on multiple factors. It is possible to find cheap life insurance for seniors in 2023, however, if you conduct proper comparison-shopping and policy research. Some policies are available for as little as $10-$15/mo.
Additional top life insurance providers in 2023 include:
- Guardian Premium.
- Northwestern Mutual.
- Mason Finance.
Online rate and premium calculators are provided by many life insurance companies for seniors to make finding the most affordable plan simple and convenient. New York Life, State Farm and Mutual of Omaha are three top providers of senior life insurance plans today. Choice Mutual is one of the best final expense insurance providers as well.