Senior citizens often believe they have enough savings, health insurance, or retirement accounts to cover medical bills or final expenses. But, a serious illness or an extended stay in a nursing home can quickly deplete those resources. In these instances, a seniors life insurance policy can provide an important safety net for senior citizens and their families.
Some folks believe that as they enter their twilight years, their obligations diminish. Nonetheless, life insurance for senior citizens is a good idea for several reasons. The benefits can far outweigh the costs and provide seniors with peace of mind knowing they are protected.
Do senior citizens need life insurance? Here are 3 good reasons why they should consider it.
1. Seniors Life Insurance Is a Safety Net Against Medical Debt
Did you know that 62% of personal bankruptcies are a result of medical debt? The biggest threat to a senior citizen’s financial health is a medical crisis. Increasing medical costs only make the potential for financial ruin more likely. Also, shrinking pension funds contribute to the number of seniors filing for bankruptcy today.
Life insurance for senior citizens can provide some protection against medical debt. For instance, permanent life insurance policies offer accelerated benefits for terminal illnesses. Policyholders can receive up to 90% of the face value of the policy if they have been diagnosed with a terminal illness. Although taking the living benefits will reduce the value of the death benefit, it is a valuable safety net.
2. People Are Living Much Longer
People are living longer, according to the Social Security Administration. Today, men average living to age 84 and women to age 87. That’s more than ten years longer than the life expectancy in 1950. With people living longer, it puts a strain on pension funds, retirement savings, Social Security, and Medicare.
Most seniors planned to budget enough money to get them through to about age 65 or a little longer based on life expectancy predictions at the time. But, they now must find the means to support themselves for an additional 16 to 18 years. Some people combat this issue by working beyond retirement age, but others aren’t able to do so due to health reasons.
Life insurance for senior citizens is a good idea because it can act as a backup plan. For example, some insurance policies accumulate a cash value that can be borrowed against. Money borrowed from this type of policy is tax-exempt and has low-interest rates. Additionally, some policies earn dividends. The dividends accumulate interest and are paid to the policyholder to be used as needed.
3. Prevents a Financial Burden for Family Members
Many senior citizens are still carrying mortgage debt in their retirement years. This could be due to paying for college for their children, taking out a second mortgage to pay off other debts, or taking in adult children during the recession.
If a senior citizen falls ill, their savings and retirement funds can be depleted. In the event of the person’s death, the responsibility of paying off the mortgage may fall on family members. A life insurance policy can prevent burdening the family with mortgage payments and other debts.
Situations When Seniors Life Insurance Isn’t a Wise Choice
A few downsides to life insurance for senior citizens should be taken into account as well. Factors such as advanced age or health problems may result in high premiums. Therefore, it may not make good financial sense to purchase insurance.
Also, some companies may not pay death benefits in the first two years of the policy. So, a person with a life-threatening condition must consider whether or not he will survive long enough for loved ones to receive the benefits.
Advanced age or health issues can also prevent a person from qualifying for a policy. If this is the case, consider a final expense or burial insurance policy.
What Is the Best Seniors Life Insurance?
Buying life insurance for senior citizens is a good way to ensure protection from financial disaster in the event of illness or death. Whatever reasons for buying life insurance in your senior years, some key facts should be considered. For instance:
- Premiums may seem high. However, don’t let this prevent you from getting the coverage you need. Shop around and compare rates before making a decision. Many companies offer affordable premiums for senior citizens. Keep in mind that as you get older, life insurance premiums can increase depending on the type of policy you have.
- Know if the premiums are fixed. Some insurance policies gradually raise the premiums as the policyholder ages, so be sure you find out if the premiums are fixed.
- Is a medical exam required? While the premiums are higher for no-exam policies, they are available, even for people with health issues. It depends on the company and the type of policy whether a medical exam is required.
The best life insurance for seniors depends on why you want the coverage. Do you want it to pay off a mortgage after your death? If so, a term insurance policy may be the right type for your needs. Or, do you want to leave an inheritance to your children? In this instance, a whole life or universal life policy is best because the policy remains in effect for the policyholder’s entire life.
Talk to Sandifer About the Benefits of Seniors Life Insurance
Buying life insurance for seniors can be a source of stress and confusion. Why not make the process easier by talking to our experts? At Sandifer Insurance Agency, we have 40 years of experience in helping clients get the best insurance for their needs. Our team will be happy to answer your questions about the benefits of life insurance for seniors.
Whatever your insurance needs, reach out to Sandifer Insurance Agency located in Cheraw, SC. We specialize in homeowners, automobile, life, farm, and commercial insurance. Get in touch with us via phone, email, or online, and we will make the process of buying insurance as simple as possible.
Sources:
- https://www.iii.org/article/8-smart-steps-for-buying-life-insurance – 8 Steps for Buying Life Insurance
- https://www.infoplease.com/us/population/life-expectancy-birth-race-and-sex-1930-2010 – Life Expectancy at Birth by Race and Sex, 1930-2010