Contrary to what many of us think, life insurance is still something that every person should add to his/her overall financial portfolio even in the retirement age. But finding and buying a policy could be a real challenge once a person hits a certain age. Life insurance for people over 70 could be used as a financial assurance for individuals who want to leave financial support upon their death to their heirs.
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In some cases, claims are used to shoulder estate taxes or settle financial obligations, a strategy to spare heirs from the usual burden brought about by such liabilities.
We have discussed here details about the term and whole life plan without a medical exam.
Deciding what coverage type to buy is definitely the first challenge that our elderlies must overcome when buying insurance products at their age. There are certain policy types that could be explored.
A short term policy is often seen as the most practical option for these citizens. The policy could provide coverage for about 10 to 20 years, which is assumed to be enough time for insurance needs. For the budget-conscious seniors, this could be the best choice as premiums tend to be cheaper compared to other insurance products for them—the expiration date set could be cited for this. But there is a setback and this arises when the policy owner outlives the term.
As mentioned, short term policies are usually more recommended not just for the practical reasons but more so because it is typically easier to infuse additional benefits (though of course, coming with adjustments to premiums). A policyholder could opt for a terminal sickness component, which would be beneficial in the event the individual incurs terminal sickness.
Another add-on benefit that can be considered for short-term products is excellent care protection, which facilitates medical or non-medical care for a policyholder who is diagnosed with any chronic illness that makes him/her unable to care for himself/herself.
For those who prefer a longer period for coverage, the whole life insurance is the way to go. The product could provide for final expenses (including funeral or burial needs) longer than the typical 10 to 20 years offered in short term. This makes it a better choice despite its higher premiums. However, whole life insurance might still set a time limit for coverage, commonly until the age of 100 up to 120 (though there is an option to make the policy effective until death as long as premiums are continuously paid). There is less chance that a policyholder would outlive the period.
For the whole life insurance, the additional benefit could be in the form of cash value component that accumulates over time. This makes it possible for the policyholder to borrow money from the insurer against the cash value of his/her policy (with a limit) making it helpful if some urgent needs may arise. Logically, getting such loan would affect the overall value of the claim in the future.
Not to be overlooked when considering life insurance for seniors over 70 is the policy applicant’s state of health. This factor makes buying and owning insurance more difficult in this life stage. Of course, most insurance companies tend to decline policy applications of retirees who are suffering from serious or threatening medical conditions. Any business simply dislikes taking risks.
Thus, many life insurance products for the elderly generally require a medical examination that is facilitated for free and is shouldered by the insurer. Such medical exams involve height and weight measurements, blood pressure monitoring, and blood/urine sample analysis. The insurance underwriter may also require other medical information as part of standard due diligence.
However, it is still possible to buy a short term or whole life insurance without undergoing a medical exam. Such products may simply set a cap on death claim or benefit (usually about $25,000) making it less attractive to most consumers. And because of the risks involved, insurance companies logically tend to require higher premiums from such policies. The duration of the coverage in both types of insurance remains.
You can find details about this policy, on this post.
Definitely not to be overlooked when considering life insurance for older people (and generally for all ages) is the cost—or regular premiums to be paid (in some products, there is an option to make a one-time, big-time payment for a policy).
As already stated, premiums for end-stage life insurance tend to be higher as insurers put into consideration the fact that retirees will need the coverage soon and that there could be underlying medical and physical conditions that may affect life expectancy. It should also be underlined that premiums for male policyholders tend to be higher compared to their female counterparts.
Insurance premiums are also adjusted annually. For example, in a typical 10 years term life insurance for seniors 70, a monthly premium of $90 is collected for a $100,000 coverage; it is higher at around $175 for a $250,000 coverage and is even heftier at around $325 for a $500,000 coverage. When the same man reaches 75, the premiums are adjusted as follows: $155, $345, and $655, respectively.
In comparison, a general whole life insurance may collect a monthly premium from a man aged 70 of $235 for a $100,000 coverage; $560 for $250,000; and $1,120 for a $500,000 coverage. At 75, premiums can rise to $325, $745, and $1,485, respectively.
However, this cost varies from company to company and person to person, so compare rates first.
Considering all these basic factors, is getting a life insurance still viable and advisable for people aged 70 years and above? There are pros and cons, hence, comparing the rates is very important to get a decent policy.
Walter C. Rouleau
Life Insurance Guideline
N Centre St
Los Angeles, CA
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