Life insurance can be very confusing, but it doesn't have to be. There are basically 3 different types of life insurance for elderly people. We will explain the differences to you and make it as simple as abc!
Types of Life Insurance
- Term Insurance- this is insurance that keeps the premium and face amount level for a specific period of time. After that time period the price goes up drastically.
- Universal Life Insurance- this is insurance that lasts for your lifetime. It is very flexible and can be structured to your needs. It can amass cash value or not. It can be guaranteed for a specific period of time. Generally the face amount starts at a minimum of $ 25,000 or more.
- Whole Life Insurance- this type of insurance lasts for your lifetime too, however, it does amass cash value. Final expense insurance is a type of whole life and starts with face amounts as low as $2,000.
Each type of insurance will be the best option for certain situations. Your needs, budget and health will ultimately help you determine what policy will be your best fit. An independent agent can help you decide.
Your Best Advocate
Using an independent agent who specializes in senior life insurance will likely make the process even easier and more understandable. Here's why:
- An independent life insurance agent has many companies available and can choose the best one for you. Each company has slightly different underwriting guidelines and asks medical questions slightly differently. This can be the difference between an approval and a decline.
- Independent agents often have an in-house underwriter to help pick the best company for you. Also the in-house underwriter can communicate directly with the company underwriter and that can speed things along!
- An independent agent knows about certain offers that different companies may have. For example, if you purchase a universal life policy some companies may improve your rating (thereby lowering your premiums) if you fit certain criteria.
- You can't easily get quotes for permanent life insurance on-line. You also wouldn't know what type of coverage to get, what company would be best for you and what options you may want.
- They know which companies are financially strong.
- They know which policies have guaranteed face amounts and premiums.
- And they know all of the other details you may not be aware of.
An independent life insurance (who specializes in seniors) can be a terrific asset. They can help you understand your choices and explain why one is better than another. For more information click here.
How Do I Know What's Best for Me?
There is definitely a policy available for you. Your independent agent will help you find the most affordable coverage that you can qualify for. As a senior you have several options...
- Term Life Insurance is probably best for you if you are guaranteeing a loan or mortgage and you know when the debt will be over. If you are looking for coverage for the end of life, term is a mistake because what happens if you outlive the term? You may be at a point where you can't get insurance any longer because you are too old, or you are priced out of the market. The older you are when you purchase your policy, the higher the premium.
- Whole Life Insurance, also known as Final Expense Insurance- Companies generally offer from $2,000 up to $25,000 of coverage. Some companies go as high as $40,000. If you want more coverage, you have to buy from multiple companies.
- This coverage has simplified underwriting. That means no exam, no blood test or urine test. If you can answer "no" to a number of questions you will likely qualify for the coverage. The company will check certain databases (Rx, Medical Information Bureau, and others) to confirm your application. These policies are usually approved within about a week from application time. They last for your lifetime, the premium and the face amount remain the same.
- Universal Life Insurance requires more underwriting including a blood and urine test and medical records. Depending on how quickly your medical records are received will determine the time frame. We find these type of policies usually take 6 weeks to 2 months to put your coverage in force.
- Guaranteed Issue Insurance policies require no medical questions. Anyone can get this type of coverage, but it is really only a good option for the uninsurable. If you pass away during the first 2 years from anything (other than an accident) your beneficiary will receive your premiums paid plus interest back. After 2 years they would receive the face amount no matter the cause of death.
The Bottom Line
As you see anyone can secure coverage. Hopefully now you understand the different choices and see how an independent agent can help you to find the best options for your personal situation!