Life Insurance for Seniors
Selecting a life insurance plan when you are a senior over 70 does not have to be so complicated. It really all comes down to the same questions one may ask when they are under age 70. What does the plan cover and how long is my coverage good for?What should your plan cover if you are over 70?Fist of all, if at all possible, your plan should offer immediate coverage. In other words, should the insured die shortly after the coverage is in force, the full face amount should be paid to the beneficiary(ies). Although cash value is a nice added benefit, we do not feel that it is of prime importance to a senior's life insurance plan. Some may say that with full endowment polices, the senior will have the advantage of getting the full face amount of their policy in cash at the end of the term. We do not feel that this is a great advantage as, unlike the face amount, the cash value may be taxable. If you are interested to know more, take a look at Life Insurance for Seniors. So, what should have been a tax free payment upon death becomes a possible taxable payment to a senior who outlived the insurance policy. If at all possible, if a insured outlives a whole life insurance policy, the owner of the life insurance policy, should request an extension of coverage rather than a cash payout.Some insurance policies will also offer a terminal illness rider. That rider is often included at no extra cost to you but it may need to be requested to be included. The terminal illness rider, allows for the insured senior to use a portion of the face amount of the policy before death and in case of a covered, diagnosed terminal illness. Another rider that may be important, although not often available, is the long term care benefit rider. This rider can be very useful, particularly if you do not carry a long term care insurance policy. Briefly, long-term care (LTC) is a variety of services which help meet both the medical and non-medical need of people with a chronic illness or disability who cannot care for themselves for long periods of time.Please be aware that some whole life insurance policies, when the insured is not in the best of health, will postpone coverage for two to three years. What that would mean for the senior or mainly the beneficiary, is that during first the two to three years of coverage, should the insured die, the face amount will be limited to the premiums paid plus some interest. If applicant cannot qualify for a standard life insurance policy, we have found these polices (graded life insurance) are a very good choice. After all, some of these policies may pay you 5% to 10% on your money for the first two to three years until the full face amount kicks in. How many people can get 5% to 10% on there money without risk in bad or even in good economic times. So if you are a senior over 70 and cannot qualify for level whole life insurance, then graded life insurance may be a very good choice.How long should coverage and rates be guaranteed on life insurance policy for a senior over 70?The answer is simple, as long as possible! The reason is that many seniors today will live to age 90+. So if a senior over 70 gets a term life insurance policy and, most likely, will only be able to get a 10 to 15 year term, the insurance coverage may run out at a time it will likely be most needed. In a situation where the life insurance coverage, a senior needs, is very specific to a liability (mortgage, car loan...) a term life insurance policy may be the better choice. Most senior policies are used for the purpose of taking care of final expenses including among other things, burial cost though. Your coverage is more likely to be a long term need and if you do a term life insurance plan, after it runs out, you may have to get re-approved for coverage and will pay much more in premiums and are more likely to be highly rated or declined (depending upon your health and other factors). If a term policy is absolutely needed, we recommend that seniors over 70 also take a whole life policy. The whole life should guarantee rates and full coverage to at least age 100 or longer (age 120 maybe available). Beware of whole life polices, particularly group sponsored or government issued whole life policies, that grade down the coverage after age 70 or 75. Those could be as bad as having term life insurance. Get your own senior life insurance plan! Exam or no exam life insurance for seniors over 70?We have covered the exam or no exam issue in many other articles. We felt though that it would be important to mention the major factors for seniors over 70. Simply, if you need a smaller amount of coverage such $5,000 to $50,000, we recommend the no exam route. The policy is more likely to be approved and approved fast. If you need a large amount of coverage, then the no exam plans will either not be available or become too expensive. The full underwriting exam route is best.Irregardless of which plan you select, as we say in all of our articles, ask, ask and ask more questions. Be well. For more info, visit Life Insurance for Seniors.