Many seniors have a misconception they are unable to secure an excellent rate on their life insurance policy just because they can be categorized as a senior. Fortunately with new life insurance programs and the fact that we are living longer, life insurance premiums have really never been more affordable, especially for seniors.
Choosing the correct policy as a senior is very important. You need a policy that will not only meet your objectives but also your budget.
Types of Policies
Term Life-For seniors who are in average to excellent health, term life is a terrific and affordable option.
Pros- Term life insurance is inexpensive and can provide a large death benefit. Also, term life premiums are fixed for a specific period of time. Once you are approved, you cannot be dropped during your term if your health changes. In addition, you have the option of converting your term policy into a permanent policy without a new medical exam before the age of 70 (each company is different, check your policy).
Cons-The downside to purchasing a term policy as a senior is the possibility that you could outlive it.
Universal or Whole Life-This is permanent insurance. Many seniors are looking for a policy that is guaranteed to payout to cover final expenses or to leave money to their family.
Pros-Unlike term life insurance, permanent insurance is guaranteed to payout the death benefit..
Cons-The downside to permanent insurance is the fact it’s more expensive than term life. For many seniors who want the security of a policy that will be there no matter how long they live but also are looking for a policy with a lower cost and are insurable, choosing a $25k-$100k no-lapse guarantee universal policy is an excellent choice.
Guaranteed Acceptance Life Insurance-Seniors who purchase guaranteed acceptance insurance are those who can’t qualify for any other type of life insurance due to health problems.
Pros-The advantage of this policy is the fact they don’t ask any health questions or require a health exam.
Cons– The huge drawback to guaranteed acceptance life insurance is the two or three year waiting period before the policy will pay out. This means if the insured dies in the first two or three years of the policy from natural causes (heart attack, cancer, phenomena, etc.) the premiums paid will be returned to the beneficiary and the death benefit will not be paid. Another drawback is the fact that these policies can be expensive and if you live a long time you would have been better off putting the money in the bank.
How Much Does Insurance Cost for Seniors?
Here are sample premiums for each type of policy listed above for a 65 year-old female:
$100,000 20 Year Level Term $66 month $117 month $100,000 No-Lapse Universal to age 100 $133 month $188.70 month $25,000 No-Lapse Universal to age 100 $45.20 month $60.78 month $15,000 Guaranteed Acceptance $76 month $76 month
Life insurance can still be very affordable for seniors, especially those who are in average to excellent health. It’s very important to weigh your options and know which type of policy will best meet your needs and also your budget. Work with an agent who has your best interest at heart and has the flexibility to work with many different companies to secure you the best policy for you and your family not the agent.
Looking for the best rates on life insurance? Compare direct rates from the top carriers below
*Rates as of 09/04/2013. The information in this post is for informational purposes only and is not a guarantee of rates and insurability. Rates and eligibly are subject to the underwriting guidelines of the insurance companies and state in which you live.