Affordable Life Insurance Rates For Seniors
It is no secret that people who are considered seniors pay more in life insurance rates than someone how is, say, 20-years-old. However, it is important to note that while seniors pay higher premiums, it is balanced by lessor needs. Someone who is 50-years-old has fewer life insurance needs than someone his is just starting out in life.
For the majority of life insurance policy owners, the purpose of the coverage is to protect our loved ones, in case of a premature death. However, chances are, at the age of 50 a person would not have people depending on them. Most of the financial responsibilities have vanished and there may even be a collection of assets to provide for any dependents, should there be any. Therefore, the needs of a 50 year old will greatly differ from someone who has a new mortgage and a baby on the way. While the rate may be higher for someone over 50, less of a need translates into less coverage.
Why are the rates higher for someone who is older? The simple answer is that as someone ages, the probability of death is greater, thus the probability of a life insurance company having to pay out is greater. The probability of death for an individual aged 50 years or more is greater than for an individual in his 30's or even 40's. An older person is a greater risk to the insurance company. In order for the life insurance system to work, those who have greater risks pay higher premiums. However, this does not mean that a person who is over 50 will have to pay insane rates; they too can shop many carriers and products in order to ensure they are getting the best rates for their needs.
Given the information that your rates will, understandably, be greater but your needs will be lesser; there are shopping techniques and products for someone over 50-years-old. Senior term life is going to be the cheapest option. A senior shopper would do well with a short-term life insurance policy and a small death benefit. This will provide ample coverage for the remainder of time one would require such coverage. Term life rates are based on two things, the policy's coverage amount and the length of the coverage term, so term life insurance would be an affordable solution for someone who doesn't need a lot for a long time.
Something that has yet to be addressed however is health. There is a possibility that the person applying for coverage may have a health problem or two, during this stage of their life. This can affect their insurability, and some health concerns may even disqualify individuals from certain products. Someone experiencing health problems may want to look into products such as graded benefit whole life insurance or single premium whole life insurance.
by: Angela Rosas