Life Insurance for Seniors – What to Know?

personal finance

Although modern medicine is often capable of performing almost magical feats, it still cannot stop or reverse aging. It is an unfortunate inevitability that, sooner or later, we all will have to leave this plane of existence.

However, while death from old age cannot be stopped, it is possible to lessen its impact on those around you – by getting proper life insurance.

To help you understand why you might need a life insurance policy, below, we’ll explain in detail what such a policy is and how it can benefit your loved ones. We will also discuss various factors that might impact your life insurance premiums.

Read on and understand the most important facets of life insurance!

What Is Life Insurance?

Life insurance is a type of contract between an insurer and the policy owner. The insurer agrees to pay a set amount of money to the policy’s beneficiaries in the event of the owner’s death.

In order to get life insurance, you are required to either pay a single premium or a series of premiums throughout the policy’s term. There are two main types of life insurance policies: permanent life insurance and term life insurance.

Permanent life insurance provides lifetime protection as long as you live and keep paying your premiums or until you terminate the policy. On the other hand, term life insurance usually expires after the number of years specified in the contract.

Life insurance policies are especially popular with senior citizens because they can provide important financial security to your loved ones in the event of your death. As such, the market is full of different options, such as life insurance for over 60s or even over 80s.

Why You Might Need Life Insurance

Now that we’ve explained what life insurance is, let’s go over the main reasons why you might need a life insurance policy:

  • Life insurance provides a security net to your spouse in the event of your death. Depending on the size of your life insurance policy, it can significantly help them make ends meets once you are gone.
  • Life insurance can be used to pay off debts you might have left behind (e.g., mortgages or loans). This way, your loved ones will be able to focus entirely on paying their respects to you instead of straining their finances to settle any debts you left behind.
  • If you have younger children, your family can use your life insurance to save for college tuition and help them start their life on the right foot.

As you can see, there are practically no limits to what life insurance can be used for. Your loved ones get a lump sum of cash from the insurer and are free to use it as they see fit. This makes life insurance a very thoughtful parting gift to those you cherish.

Can You Have Multiple Life Insurance Policies?

Theoretically, you can have multiple life insurance policies at the same time, as there is no limit to the number of policies you can have. This will also result in your family having more benefits in the event of your death.

However, it’s important to note that having multiple life insurance policies at once comes with its own set of drawbacks. A big disadvantage of having multiple life insurance policies is the high amount of paperwork you will end up dealing with.

You might also be required to pay several monthly premiums. If you can’t keep up with the monthly payments on your life insurance policies, they will be canceled by the insurer, and your beneficiaries won’t be able to get any benefits from them.

As such, it might be a good idea to consult an expert in the field to find the single best life insurance policy for you and your family. This way, you will be able to get the most out of it and not have to worry about multiple policies with potentially high monthly premiums.

What Factors Impact Your Life Insurance Premiums?

The premiums you will be required to pay will depend on a number of factors. Some of the most important ones include:

Your Age

Your age is one of the most important variables that will impact your life insurance premium. Age is a crucial risk factor that insurers have to take into account. Simply put, the older you are, the more likely it is that you will die in the near future.

Therefore, in many cases, insurers will charge a higher premium, e.g., for customers over 90 years old than those at retirement age.

Substance Use

One of the first things most insurers will ask you is whether you use any substances. Abusing substances such as cigarettes or alcohol has the potential to significantly shorten your lifespan.

Because of that, you can expect the insurers to charge you a higher premium – in some cases, even twice that of what a non-smoker or a nondrinker would pay.

Medical History

Your medical history might influence your life insurance premium in two ways.

First, if you have any pre-existing medical conditions, then the insurer might raise the regular monthly premium, as you will be considered a higher risk.

Secondly, if your family has a history of hereditary diseases, then you might also be required to pay more. That is because your insurer will assume that you can develop those diseases at some point in your life and perhaps even pass away sooner than expected.

Conclusion

Life insurance is often an overlooked aspect of financial planning. Although few people like to think about their own passing, it is inevitable and can happen at any time – especially once you reach an advanced age.

Life insurance for seniors helps their families by providing them with a lump sum of money in the tragic event of the policyholder’s death. They are free to use the money as they see fit, for example, to pay off any debts or pay for the higher education of their dependents.

Bear in mind that the amount you will be required to pay for your life insurance policy will depend on a number of factors, including your age, health, and even a history of substance abuse.

However, even such additional costs are still a very small price to pay for the peace of mind life insurance offers you and your loved ones. So, make sure you get life insurance as soon as possible to protect your family and show them how much you care!