Types of Life Insurance for Seniors
Term Life Insurance for Seniors
Term life insurance provides a death benefit to beneficiaries if the covered person dies during the term of the policy (usually 10 to 20 years). If the policy expires while the holder is still alive, they may renew it for another term, convert the policy to permanent coverage, or allow it to expire. Term life policies are low in cost for individuals in their 50s and 60s but become more expensive and difficult to find coverage for those who are over 75.
Tip: Life insurance companies offer free medical exams to potential customers.
Whole Life Insurance for Seniors
Whole life insurance differs from term life insurance because it is permanent coverage with no expiration. This coverage provides a death benefit as long as the policyholder pays their insurance premiums. This policy also includes a savings component that sets aside a portion of premiums into a separate account that you may withdraw from or borrow against.
Whole life policies are also called “traditional” life insurance and are typically more expensive than term life insurance products. Usually, these policies make sense for younger individuals, as monthly premiums can be steep for older adults.
Guaranteed Issue Life Insurance for Seniors
Guaranteed issue life insurance is a policy that requires no medical exam or requirements to receive coverage. These are sometimes called “no medical exam” life insurance and are perfect for those with health issues that make it difficult to qualify for other life insurance coverage.
Whole life and term life policies usually require medical exams to determine life expectancy, premiums, and coverage. While guaranteed issue plans do not require medical information from the policyholder, there is often a waiting period of two years before the full benefits are available and premiums may be higher than other policies.
The death benefit for these policies tends to be lower than other policies, anywhere from $2,000 to $50,000. If an individual dies within the waiting period, beneficiaries do not receive a full death benefit. However, they may receive a partial benefit or reimbursement of premiums paid for the policy.
Guaranteed Universal Life Insurance for Seniors
Guaranteed universal life insurance policies are an inexpensive option with lower monthly premiums that pay out lower death benefits to beneficiaries. This policy is usually called “term for life” because while the policies are similar to term life insurance in that they do expire, they expire at a specific age (usually between 85 and 130) as opposed to a set number of coverage years.
This insurance policy is not similar to the guaranteed issue policy, as guaranteed universal life policies typically require medical exams. The “guaranteed” part of this policy is that the death benefit will be paid out as long as individuals pay premiums.
Funeral Insurance for Seniors
Funeral insurance, also known as burial insurance, is often available directly from funeral homes as well as life insurance providers. The premiums from these policies go toward a benefit that covers the cost of funeral services, including the wake and burial fees. Individuals may make monthly premium payments until a certain age or until the services are paid for. This eases the burden of loved ones to pay for costly funeral services.