subject: New Life Insurance For Older People [print this page] How Did We Get This Old Without Life Insurance policies? Many Americans pass fifty and realize that a good financial plan would include more coverage.
Maybe some people just never really felt any sense of mortality until they passed fifty, but I think most people had other reasons. Some of us had life policies through our jobs, but it did not follow us when we retired or changed jobs. Others did take out term life to protect their families or pay off a mortgage. Then that term life expired, and those people realized they had no coverage at all, but their savings were still not sufficient to take care of all obligations if they passed away.
They could still carry debts, or perhaps offspring had not yet become as self sufficient as expected. Other people realize that they might give their families a tax advantage if they pass on money through a life insurance plan, rather than just leaving them money. Others want to protect their business if they pass away, or be able to allow a partner to buy out their portion of a business from other family members.
No matter what the reason, lots of mature people, from the middle aged to the elderly, are looking for more coverage. Insurers are responding with new products that are designed for older clients. Actually, many older people can find rates that are fairly affordable, especially if they are still in reasonable health. But older people, even with health problems, can still find coverage. Of course, a normal insurance policy will cost more for a sixty year old than it would for a thirty year old, all other things being equal, but older people can have many things in their favor.
Mature people have a lot of potitive things in their favor too.
For one thing, insurers check into credit reports these days, and use that information to factor into their rates. Mature people may have developed a good credit history. They have had a longer time to demonstrate good financial management. Mortgages may be paid off, or close to being paid off, so debt is less. In addition to good credit, more mature people have often developed good health habits. Following a doctor's orders, they may quit smoking and watch their weight. These factors can help with insurance company rates too!
Smaller values of coverage may be enough for older people.
One more thing to consider when looking for life insurance for an older adult is that the amount of coverage, or life insurance need, may be less. Mature people may not need to cover the whole mortgage or plan for their children's education anymore. Instead of having to consider a policy with a death benefit of hundreds of thousands of dollars, a few thousand dollars may be enough. Maybe a mature person just wants to leave their family enough money to pay for a funeral and settle debts, with perhaps a little left over as an estate. Consider a death benefit (face value) that is in the 10's of thousands rather than the 100's of thousands. This may be enough coverage!
Life insurance companies are more willing to offer policies to older, and perhaps sicker, people if the face value is lower because their risk is less. And of course, the cost of insurance will be less when the amount is smaller.
Term life insurance is popular with younger families because it usually has the lowest monthly premiums. Many seniors, and even middle aged people, will look at permanent coverage, like whole life. These policies can grow a cash value, in addition to leaving a death benefit. These policies can do more than provide a death benefit. They can also build an asset that can be used while the insured person is alive. Some retired people will even sell their life insurance policy, before they die, to a life settlement company. They can use the cash to meet their needs while they are still alive.
by: Marilyn Katz
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