Securing the right life insurance plan later in life is an important part of ensuring security for your family and giving you peace of mind.
The right plan can offer significant financial benefits like replacing an income, but its most important job is to protect your family in difficult times.
Before you start looking for quotes consider these three guiding principles to help you get the right policy at the best cost.
Get an Expert on Your Team
Independent life insurance agents can help you understand the different types of senior life insurance and support you in selecting an affordable plan that fits your needs. Captive agents work for a single insurance company and can only offer you products from that one carrier. Independent life insurance agents shop and generate quotes from several companies all competing for your business. An independent agent can look at 60 or more carriers with multiple policies available. Although there are many companies to choose from, we prefer to work with companies rate A or better from A.M. Best (an independent insurance company rating service.)
There are several different types of life insurance to choose from:
- Term life insurance- Term policies are the easiest to understand. They keep the face amount and premium cost the same for the length of the term. You can get policies with 5,10,15, 20, 25 and 30 year terms. You can also get an annual renewable term policy that increases in cost every year. We usually find that the reasons seniors want life insurance leads us to recommend a permanent policy (one that lasts your lifetime). Term insurance is appropriate when you need coverage for a specific period of time, for example to guarantee a loan.
- Universal life insurance- Universal life insurance policies are very flexible and can be structured many different ways. For senior life insurance we usually set the premium and face amount to remain the same for the life of the policy. If we minimize cash accumulation, these are generally the least costly permanent policies available. These policies require full underwriting including a paramedical exam, blood and urine collection and doctor records. They can take about 4-8 weeks or more to have coverage.
- Whole life insurance- There are several different types of whole life insurance for senior citizens. They are:
- Final expense insurance- This type of policy is available with amounts from $2,000 up to $40,000. The face amount and premium remains the same throughout the life of the policy. These policies are easy to purchase. They require simplified underwriting meaning you answer a number of medical questions on the application. Then the carrier will check one or two databases to confirm your answers (i.e. a prescription database). If everything matches and you are approved, you can be covered in a few days. In some cases you can be covered immediately (some carriers have phone interviews and will approve you on the call.) If you cannot qualify for immediate coverage, you may be able to qualify for a graded policy. This means your coverage will phase in over 2-3 years. You will only have accidental coverage or a percentage of the face amount during the graded period.
- Guaranteed issue insurance- This type of whole life coverage has no medical requirements. It is the most costly of the whole life policies, but if you cannot qualify for underwritten coverage this is a way to still pay your final expenses and protect your family. The amount of insurance available is up to $25,000 depending on your age. If you want more coverage you can apply with multiple carriers.
This information can help you get an idea of the different life insurance policies available for senior citizens. Your independent agent's job is to find out from you what your goals are and then get enough medical history from you to let you know which type or types of coverage you may be able to get. Every company looks at medical issues a little differently, so your agent can help you find a company that is likely to approve your application.
Because independent agents are not employed by any one single insurance firm, their number one priority is finding you affordable life insurance policies that will provide you with years of security. Additionally, they have access to quote carriers that you will not find on most online quote engines.
Don’t be Overwhelmed by Choice
Experienced independent agents know the landscape. They’re familiar with the different carriers and what each one has to offer in relation to senior’s needs and/or specific risk factors. for example life insurance for seniors over 65 offers many different options compared to life insurance for seniors over 80 or 85.
Working with an independent agent means you can make informed decisions about your policy type, the length of your term or if you need a permanent policy and the payout to your beneficiaries. For example, seniors who need quick access to affordable life insurance plans may want to talk to their agent about applying with a conditional receipt that will cover them during the underwriting period.
Remember, it’s important to review and understand the terms and limitations of your plan before you buy, and this is where an independent agent can help you learn the little details of life insurance.
How Your Health Affects Your Premium
Good health is one of the best ways for seniors to secure affordable life insurance plans. Your health will impact both the application process and your premiums. When reviewing your life insurance application, companies will assess things like heart health, general level of fitness and family health history.
Conditions like diabetes, blood pressure and cardiovascular issues which tend to increase between the ages of 50 and 65 can make it more difficult to find an affordable life insurance policy. An independent life insurance agent can help you because they will know which companies look more favorably on your health issues. Finding the best life insurance for seniors over 60 can be complicated not only by your health issues, but also by the amount of policy choices.
Your independent agent will know not only which companies you should consider applying with, but they will know which ones you should avoid.
How to Find Affordable Life Insurance for Senior Citizens
Step 1-Find an independent life insurance agent you want to work with.
Step 2- Consider your goals and your budget.
Step 3-Your health and the amount of insurance you are purchasing will help determine the specific type of policy that's best for you.
Step 4-Your agent will help you get to the company that is most likely to insure you at the best value.
The Bottom Line
It may seem time consuming to go through these steps before the application process even begins. But by seeking professional guidance and support from an experienced independent life insurance agent, senior citizens can shop the market for affordable life insurance plans that reflects their budget and their health—whatever they may be.