Life Insurance for Seniors
“Why do I need life insurance at this age?” This is one question that seniors bring up, especially when they are being offered by this type of insurance.
Life insurance is a type of insurance in which the insurance company pays the policyholder’s company, as per agreed terms, when the policyholder dies. Therefore, if you have individuals that depend on you for financial support, you may need this type of insurance.
In line with this, the next question will be: “What type of life insurance should I purchase?” There are four major types of life insurance, to wit:
1. Term Insurance – the most basic and comprehensive life insurance that one can purchase under the age of 50. This type of life insurance is renewable, depending on the terms agreed upon from a year up to 10 years;
2. Whole life – a combination of savings and permanent protection. Your insurance partner basically makes the decision on what plans should be included to your policies, thus, making it a fixed type of insurance;
3. Universal life – typically similar to whole life, except that it has extra chance of higher earnings due to its flexibility. However, along with its flexibility come higher fee requirements on a policyholder; and
4. Variable life – similar to whole life in terms of being fixed, but differs in terms of the freedom of the policyholder to choose when and where to invest his/her cash. In addition, due to the freedom given by this type of insurance, the policyholder’s benefits and cash values will vary depending on his/her investments’ performance.
Making a personal investment, such as getting a life insurance, is both an important and a complex topic, especially when a person is already nearing to the end of his/her journey because this is going to be the one to support his/her family after he/she passes away. Therefore, it is vital to know the things that should be considered before one can invest in insurance. Here are two important tips to consider when choosing the perfect life insurance for seniors:
1. Go over term life policies.
Term life policies are cheaper compared with whole life policies. Both policies are basically the same, except that the former do not increase in terms of cash. In addition, if you are thinking of getting a short-term plan, go for the term life insurance.
2. Read and understand the policy rules.
It is highly recommended that you read and fully understand the policy that you are into. If you can’t understand a certain line, product background, or policy, don’t hesitate to ask questions. Don’t just assume that everything is covered because most of the time, they are not.
While you’re thinking that it is all about the companies and the policies that they offer, you have also something to contribute in order to achieve your dream insurance in terms of paying its rates. Here are some key points to keep in mind:
1. Know your budget.
Needless to say, budget consideration applies to every type of insurance. Always consider the budget that you can provide to the insurance in order to prevent non-compliance and for you to enjoy optimum benefits of your chosen policy.
2. Know when to say “NO”.
So, thinking that you already have in the policy what you need, you stop accepting further offers. Don’t be blinded by the good and enticing words and good-looking packages and agents of an insurance company for they’re all part of the business – to lure you. The more you accept, the higher the rate you’ll be paying.
3. Consider changing your lifestyle.
In a research conducted, a senior who smokes and drinks often pays 30 to 40 percent higher in insurance compared with those who don’t. Therefore, the more cigarette- and alcohol-free you are, the lower the rates you’ll be paying.
4. Avoid engaging to dangerous sports.
Research shows that seniors nowadays are more active in terms of engaging in dangerous sports. Although you might enjoy the perks of feeling young again in such activities, remember that the more you engage in it, the higher the fees you’ll be paying.
5. Monitor your investment and insurance.
Try to learn monitoring your investments and insurance plans. Remember that this is your hard-earned money from the past years’ hard work, therefore, aspects you are using it up for are worth monitoring.
Investing in insurance is a major decision in everyone’s life, especially for a senior citizen, since he/she is in life’s final phases. It is thus important to know the pros and cons of investing in one because in the end, it is you and your family that will gain benefit from it.