How to Get the Best Life Insurance Rates for Seniors

Lenny Robbins
Nov 16, 2018 10:10:00 AM

Are you or a family member looking for life insurance for seniors? There are several items for you to consider before applying.

    • What type of policy should you get?
    • How much insurance?
    • What are the best companies for seniors?
    • What about riders?
    • Agent or no agent?
    • Medical exam or no?
    • And more!

We will give you all of the information you need to choose the right type of coverage at the most affordable price. There are many topics we will discuss here. You can use this table of contents to jump to any section you want to start with.

Why Seniors Might Need Life Insurance
Terms You Need to Know to Understand the Basics
What Policies Are Available for Seniors
What Exactly is No-Medical Life Insurance?
Which Policy is Right for Me?
What are the Best Companies for Senior Life Insurance?
Long Term Care and Senior Life Insurance
How to Get the Best Quote
Sample Quotes for Seniors
The Best Agent for Senior Life Insurance Quotes
How to Apply (and how to speed up the approval process)

Why Seniors Might Need Life Insurance

There are many reasons why you might need life insurance at this age. As we live longer, more and more baby boomers and seniors will need life insurance. Your "nest egg" will have to last longer and you have more chance of requiring funds for medical costs. Your reason for wanting coverage will impact the type of policy you will choose.
  • Income replacement- you may still be working and have a spouse and/or family that relies on your income. The type of policy you buy will depend on your specific situation. 

  • Debts- you may still have a mortgage to pay off and you don't want your family to be responsible. Or you may have other debts to cover. A term policy might be right for this situation. 
  • Final expenses- you want to leave enough money to cover your funeral. Most funerals in the U.S. cost over $7,000. Don't want to leave it to your relatives? A final expense policy is a good option because it will last for your lifetime and the premiums will remain the same. 
  • Special needs child- you have a child or grandchild that you care for and they will continue to need care for their lifetime. You will definitely want a permanent policy so that they will have the funds for the care they need after you are gone.
  • Pension Maximization- you want to take the higher pension option, but still need to protect your spouse. We can see if a life insurance policy makes sense in this situation. This works best when the insured is in their fifties.
  • Family Business- will the business need to replace you? Will the business suffer as it looks for your substitute? Insurance proceeds can help the business stay afloat until all is settled.
  • Estate Taxes- If you have property that will go to you heirs, they may have estate tax to pay. If your estate has more property than cash, you may want a life insurance to cover the estate taxes. If you and your spouse are co-owners, a survivorship policy would make sense. This is where two people are insured on one policy, but the payout is only after the second insured dies. This coverage is less expensive than two separate policies and even if one person is uninsurable alone, they may qualify for this type of insurance.
You may have other reasons that are just as valid. Whatever the reason you need life insurance, read on and learn all about it. 

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Terms You Need to Know to Understand the Basics

  • Insured- This is the person whose life is covered by the policy. senior life insurance basics
  • Owner- This is the person who can make changes to the policy, such as naming a new beneficiary. No other person can make changes to the policy (exception: if the premiums are automatically drafted, the payor can change the bank information. Very often the owner (also called the applicant) and the insured are one and the same.
  • Beneficiary- This is the person, persons, or trust that will receive the money when the insured passes away. You can have primary beneficiaries and contingent beneficiaries.
  • Payor- The person who pays the premium. It can be paid monthly, quarterly, semi-annually or annually.
  • Face Value or Death Benefit- This is the amount of money that the beneficiary will receive when the insured passes away. Also called the face amount.
  • Premium- The cost of the insurance.
  • Term- The length of time that the policy will last (assuming premiums are paid).
  • Permanent Coverage-There are two main types of permanent coverage, universal life insurance and whole life insurance. Each type has multiple policy choices, which we will discuss below.
These are some of the most important concepts you'll want to know. We explain the different options to our clients at the beginning of the process.  

.                 Free Download                    .  .              Life Insurance 101                .What Policies are Available for Seniors

Here is a guide to the different types of life insurance policies available for baby boomers and seniors

Term Life Insurance- The name says it all! There are several types of term policies. Some of these policies are available with and without an exam.
          1. Level term policy- This is where the face value and the premium remain the same. After the level term, the premium will increase rapidly. 
          2. Decreasing term policy- As the name suggests, the face value of the policy decreases over time. One example would be mortgage insurance. Unfortunately, the premium usually remains the same, making a level term policy a better buy.
          3. Annual renewable term- This type of term life insurance has a premium increase annually. Unless you really need coverage for a year or so, this is not usually the best option. Again, level term policies are the best value.

Universal Life Insurance- There are several types of universal life policies. These policies are very flexible and can be structured to suit your needs. These policies are generally fully underwritten meaning they require a medical exam and potentially medical records from your doctor(s).  
          1. Guaranteed premium universal life policy (GUL or GPUL)- These policies can be set up with little to no cash accumulation. This way they are usually the least expensive permanent policy available. They can be guaranteed to age 121 (considered lifetime!) or less, such as 105, 95, etc. These policies generally start at a face amount of $25,000, however, in some states the minimum may be $50,000 or even $100,000. 
          2. Indexed universal life policy (IUL)- These policies have an investment component in the coverage. These policies allow you to keep cash value in a fixed account (like a money market savings) or to invest in an equity index account (such as the S&P 500 or the Nasdaq 100 or other funds). Premiums , death benefit, and savings and can be altered as needed during the life of the policy. Although you cannot lose cash in these policies, your gains are limited (there is a floor to protect your cash value and a cap that limits the gain allowed).
          3. Variable universal life policy (VUL)- These policies are for a more sophisticated investor. They can only be sold by a registered representative with a securities license, as they are considered securities. You can lose money in this investment vehicle, unlike an IUL.
          4. Survivorship life insurance or second to die insurance- This is a policy that covers two people on one policy. The policy pays the death benefit after the second insured passes. This is a common vehicle for paying estate taxes. When the second parent passes, the children have cash to pay inheritance taxes. These policies are less expensive that two separate policies would be. Also, if you have one insured who would be declined for an individual policy, they can often get this type of coverage.

Whole Life Insurance- There are several types of whole life insurance coverage. Traditional whole life insurance is rarely sold and many companies no longer offer this type of coverage. We will discuss whole life insurance in the Final Expense policies available. These policies are no-exam policies.
          1. Final expense level policies-These policies are available for coverage between $2,000 and $50,000. (If you want more coverage, you will need to purchase policies from multiple companies). If you want less than $25,000 of insurance, final expense coverage is your only option. These policies are easy and quick to purchase. You can often be approved the same day of the application, or within a few days. This coverage starts for death from all reasons on day one.
          2. Final expense graded policies- These policies offer coverage from $2,000 up to $50,000 depending on the carrier (some only offer up to $25,000). The purchase process is the same as final expense level policies. The difference is that coverage for death for medical reasons does not begin at day one. It can be phased in over two or three years. Accidental death is covered on day one. 
          3. Guaranteed acceptance policies- These policies offer coverage from $2,000 up to $25,000. There are no medical questions to be answered and all applicants are accepted. There is a two year waiting period (some carriers have a 3 year waiting period) for this policy to pay for death from any medical conditions. It pays immediately for accidental death. 

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What Exactly is No-Medical Life Insurance

Purchasing no-exam coverage doesn't mean your health isn't considered. On simplified-issue-life-insurance-2018the contrary, final expense applications have a number of 
health questions that need to be answered. All carriers ask their questions differently, so you can be approved by one carrier and declined by another. 

Some carriers won't insure you for 6 months or more if you were just declined by another company, so it is preferable to apply for the right policy first. (Your agent will be able to look at the questions and help you decide which company will work for you.)

Many companies require a phone interview where the insured answers these questions on a recorded line. The carrier will check certain databases like the Medical Information Bureau (MIB) and a prescription database to confirm your information.

As complicated as it sounds, some companies will tell the agent if you are approved right after the interview! It's easy and fast.

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Which Policy is the Best Value

Value is what we all want when we purchase life insurance of anything else. But value is not only the cost of the coverage, the policy has to meet your needs. 

For example if you want coverage for final expenses, a term policy is not your best choice. But is universal or whole life better for you? Well, how much coverage you want matters. Are you healthy enough to qualify for a fully underwritten product?

Considering cost only, the policies stack up as follows:

          1. Term life insurance is usually the least expensive. However, the older you are, the closer the pricing between term and universal coverage.
          2. Next up is guaranteed premium universal life insurance. 
          3. Level benefit final expense life insurance is the least expensive non-medical permanent coverage.
          4. Graded benefit coverage is next.
          5. Guaranteed issue coverage is the most costly, but it's a great option if you aren't able to qualify for any other type of insurance.

Each type of policy has many different companies that sell them. Your independent life insurance agent will be able to steer you to the company with the best pricing for your type of coverage.

How Much Coverage Do I Need?

The amount of insurance you buy will primarily depend on your needs and your budget. The reason you are getting coverage is important here. 

Leaving money for a funeral is very different than trying to replace lost income. Funerals cost upwards of $7,000, and of course, can be less or quite a bit more. A policy for $10,000 or thereabouts might be just right. If you are looking to replace income, clearly $10,000 won't cut it. You would be looking at $100,000 or more, conceivably much more. 

You will be in the best position to determine the amount. Then, depending on the cost, you may wish to adjust the amount up or down to fit your budget.

Which Policy is Right for Me?

When you are trying to figure out which policy is best for your situation, why not make life easy and talk to a specialist? An independent life insurance agent is going to know all about the different options you have.

If you are looking for a face amount under $25,000 you will be looking at a final expense whole life policy. You may opt for this type of coverage because it is easy and fast to get. Some companies go up to $50,000 and if you want more than that amount, you will apply to multiple carriers. Then your agent's job is finding the least expensive company(s) with questions that allow you to be approved.

When you are looking for over $25,000 your choices are different. The term and universal policies are fully underwritten. They will require you to have a paramedical exam including blood and urine lab work. They will often order your doctor records for review. These policies are more time consuming to get, but they will cost less as the insurance carrier has much more information about you. 

How much insurance you want, how many hoops you are willing to jump through and how long you <>are willing wait will all factor into your decision. Additionally, you may find that you are postponed or declined for a fully underwritten policy, but will be approved for a final expense type product. Your agent can help you understand why this is so as every case is different.

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What are the best companies for senior life insurance?

There are many highly rated carriers available for senior life insurance. These companies are reputable, trustworthy companies that have been established for some time. There are many companies and we can't list them all...these are just some of our favorites. 

Carriers for Fully Underwritten Policies 

Lincoln Financial has a Guaranteed Universal Life product that is often the best priced product in this carrier. They will insure up to age 85. The minimum face amount is $100,000. They offer many riders. They are rated A+ by AM Best.

North American is the other carrier where we find the best priced Guaranteed Universal Life products. They offer coverage up to age 85 with a minimum face amount of $25,000. They are rated A+ by AM Best. They offer many riders as well. 

Both of these carriers are strong companies. We look to them first, but sometimes we have to go elsewhere. It all depends on your situation.

Final Expense Carriers 

Mutual of Omaha has been in the senior market for a very long time. They are rated A+ by AM Best. Mutual of Omaha offers competitively priced final expense policies. These are whole life permanent policies with simplified underwriting (no medical exams- fast approvals). They offer up to $40,000 of final expense insurance. 

Assurity Life is another of our final expense carriers. They are rated A- by AM Best. Assurity offers easy to purchase final expense policies, much like Mutual of Omaha. They offer up to $50,000 of coverage. These are simplified issue whole life policies. 

United Home Life is another of our go to final expense carriers. AM Best gives them an A- rating. Simplified issue products are available- level and graded policies. United Home Life offers up to $100,000 of coverage through age 60. At age 61, the maximum amount is $50,000.

Guaranteed Life Insurance Companies

Gerber Life Insurance has been in the marketplace for a long time. They offer up to $25,000 of guaranteed issue coverage. Rated A by AM Best, they are one of a handful of companies that sell this product. 

American General is relatively new to the guaranteed issue market, but has been in the life insurance business for many years. They are rated A by AM Best. They are competitively priced as well. They offer up to $25,000.

We have many other companies we work with. They include Banner Life, Protective Life, Transamerica Life, Prudential, Aetna, Prosperity Life, Lafayette Life and more. 

Why The Company Matters

It's important to have many companies offering the same products. Our goal is to get you the best coverage at the most reasonable price. As each carrier asks slightly different questions, you may qualify for a policy with one carrier and not with another.

Additionally, when applying for fully underwritten coverage, we find some carriers are more lenient with certain issues. We have to take that into consideration when deciding which company is best for you.

If company A is cheaper, but you will be rated, it might not be cheaper for you. Our goal  is to find you the least expensive coverage where you can actually get approved. 

We will tell you why we are suggesting one company over another. There are no secrets, we let you in on our thought process. This is your insurance- you are part of the decision team!

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Long Term Care and Life Insurance

Did you know that there are some companies that have riders to help you pay for some long term care expenses? These policies are not long term care policies, they are life insurance, however, they allow you to access a percentage of the face amount for critical or chronic illnesses.

life insurance and long term care
When you apply for your insurance, you must choose this rider. Then if you need it, you can access part of the funds to cover your care. Your doctor will have to certify that you have one of the covered illnesses. You can use the money any way you want, either for care, or to pay bills or however. 

If you have long term care coverage, you don't need senior life insurance with a long term care rider. This is not free, there is a cost, although it is not particularly expensive. Only a few companies offer this benefit.

For terminal illness, most policies have a benefit where you can access a percentage of the face amount. The company will allow you access the money with either a 6 month or 12 month life expectancy. Each company chooses it's own requirements. This is a free rider and included in most life insurance policies.

These payments will reduce the face amount that your beneficiary will receive when you pass away. There also are fees associated with these payments. That said, if you need the money for care or to pay your living expenses, they will be a valuable benefit.

How to Get the Best Quote

You can go on line and get a term life quote very easily. There are many sites with quote engines, even ours. What is missing from these quotes is how will you be rated? Even if the site asks you questions, it's not enough. An independent agent has many more companies available to screen than you can find online.

Fully Underwritten Coverage

For term and universal life insurance these are the rating categories starting with the best first:

          Super preferred (or preferred best)
          Standard plus (only a few carriers have this rating)
          Table ratings, either Table 1-8 or Table A-H

The price you pay for your policy will be determined by your rating. As I mentioned, you can go on line and get a quote, but how will you know what rating to use? You won't!!

An independent life insurance agent specializing in senior life insurance is the best place for you to get a quote. They will get a little information from you and they can estimate your rating. What information is most important?

          Build (height and weight)
          Medical conditions

Of course, there are many more items taken into consideration by an insurance company, but these are front and center. Again, an agent will take your information and figure out the best company for you to apply with.

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Simplified Issue Coverage

For final expense policies there are also categories for qualifying. They are:

          Level Benefit- coverage starts on day one for all reasons, medical and accidental.
          Graded or Modified Benefit- coverage is phased in over the first two or three years of the policy.

Again you can get quotes online. These should be considered a rough idea. Because your agent will ask you the same health information as for a fully underwritten policy. This will allow them to choose the best company for you.

You may qualify for a level benefit with one carrier and be declined by another. Your agent is an invaluable asset to help you determine where to apply.

For guaranteed issue coverage there are no medical questions so it's easy to get. However, it should be the last resort as it is the most expensive coverage.

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Sample Quotes for Seniors

Just to give you a starting point, I will give you some quotes so that you have a very rough idea about the costs. Remember, your cost can be more or less, as I will quote standard for fully underwritten coverage.

All quotes are for males, standard non smoker rating, and monthly premiums are rounded up to the nearest dollar.

Ten Year Term Life Insurance for Seniors
  50 55 60 65 70 75 80
$ 25,000 $ 13 $ 17 $ 24 $ 35 $ 45 $ 82 $ 211
$ 50,000 $ 15 $ 28 $ 42 $ 63 $ 84 $ 157 $ 417
$ 100,000 $ 24 $ 33 $ 51 $ 86 $ 145 $ 264 $ 607
$ 250,000 $ 47 $ 71 $ 111 $ 190 $ 318 $ 619 $ 1290

Guaranteed Universal Life Insurance for Seniors (to age 105)

  50 55 60 65 70 75 80
$ 25,000 $ 37 $ 46 $ 64 $ 82 $ 109 $ 145 $ 200
$ 50,000 $ 73 $ 91 $ 125 $ 162 $ 211 $ 282   $ 393
$ 100,000 $ 118 $ 148 $ 184 $ 239 $ 318 $ 428   $ 622
$ 250,000 $ 262 $ 324 $ 423  $ 572 $ 775 $ 1032 $ 1536

Final Expense Insurance for Seniors

  50 55 60 65 70 75 80
$ 10,000 $ 26 $ 35 $ 42 $ 54 $ 70 $ 98 $ 133
$ 20,000 $ 48 $ 66 $ 81 $ 105 $ 137  $ 192  $ 263
$ 30,000 $ 76  $ 96 $ 121 $ 156 $ 204 $ 287 $ 392
$40,000 $ 100 $ 127 $ 160 $ 208 $ 279 $ 389 $ 521
$ 50,000 $ 124 $ 158 $ 200 $ 259 $ 348 $ 487 $ 663

Guaranteed Issue Life Insurance for Seniors

  50 55 60 65 70 75 80
$ 5,000 $ 23 $ 29 $ 33   $ 44 $ 51 $ 70 $ 90
$ 10,000 $ 44 $ 57 $ 64 $ 85 $ 99 $ 139 $ 180
$ 15,000 $ 66 $ 85 $ 94 $ 126 $ 147 $ 207 $ 270
$ 20,000 $ 88 $ 115 $ 127 $ 170 $ 198 $ 279 $ 360
$ 25,000 $ 109 $ 144 $ 158 $ 212 $ 247 $ 348 $ 450

Your premium for coverage may be different than these. The premium for fully underwritten policies can vary greatly, depending on your health. The quotes for final expense coverage are for the level policy. Talk to your agent for your personalized quote.

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The Best Agent for Senior Life Insurance Quotes

There are three choices available to you:
          1. Independent agent
          2. Captive agent
          3. Insurance Carrier

Independent agents (like us) are your best bet. They don't work for an insurance company, so they can choose from virtually any carrier to get you the best value. They can be licensed in all states. They really work for you. 

Captive agents work for one company. They are limited in what they can offer you....only products from that one company. Right there your options are very limited.

Insurance carriers generally will not allow you to purchase coverage directly. They either have internal agents you can call, or they use independent agents across the country. 

One thing to keep in mind is that all independent agents are not created equally. Here's why...

Some agents work for an agency that offers multiple insurance carriers on their quote engine. However, that may be the only carriers they offer. Large agencies can get higher commissions from insurance companies when they place significant amounts of business.Therefore, they may choose to limit the number of carriers their agents can sell.

Truly independent agents (like us) can do business with any company in the country that allows independent agents. We can sign up with a company for one case if needed. Keep that in mind when looking for your agent.

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How to Apply (and how to speed up the approval process)

There are a number of steps to the process, and although it looks like a long list, much of it can go quickly. Here are the steps for both a fully underwritten and a no exam policy. 

          1. Application
          2. Medical exam or phone interview
          3. Database checks
          4. Medical records
          5. Underwriting
          6. Approval decision
          7. Accepting your policy

1. Application- Your life insurance application becomes part of your insurance contract. For this reason, we like to ask you the questions and send you a typed application to sign (either by e-application where you sign on-line or by email or snail mail. Whatever fits your comfort zone.) We know what parts need to be completed so it makes it much easier for you. 

apply for senior life insurance
The application will ask your contact info, beneficiary info, details of insurance such as type, amount, duration if it's a term policy. For guaranteed issue you are done! For final expense there will be questions about medical issues and lifestyle. For term and universal policies you may be asked medical questions on the application, or on the exam.

2. Medical exam or phone interview- Final expense policies often require a phone interview on a recorded line prior to approval. If so, we will do a three way call with you or give you a number to call at your convenience. They generally ask you the questions on the application and/or may need further info on your answer(s). This usually takes 15-20 minutes at most. Fully underwritten coverage will rarely require an interview.

Fully underwritten term or permanent coverage usually requires a medical exam. The examiner will come to your house, or you can meet them at their office. They will ask you a list of medical questions, take your height and weight, blood pressure, draw blood and have you give a urine sample. Final expense or simplified issue products do not require this exam.

3. Database checks- Almost all applications will require a database check(s) with the exception of guaranteed issue coverage. The insurer will check these:         
          1. MIB- Medical Information Bureau
          2. Rx- Prescription database 
         3. MVR- Motor vehicle report

The results of these can cause an insurer to stop underwriting your policy if they find info that makes you an unacceptable risk. For example, your MIB hit shows multiple declines for coverage. They will go to your agent for more information about why you were declined. Or you take medication that you didn't disclose on your application. They will ask you agent to get more details. Or you have too many speeding tickets or a DUI. They may ask your agent again for more info or they may decide you are not someone they want to insure.

This is one of reasons why it's important to tell your agent the truth about any issues. If we know up front, we can take you to the insurer who looks most favorably on those issues. We also can send in a cover letter with your application, explaining your issue ahead of time and putting it in the best light.

4. Medical records-Medical records will almost never be requested for final expense policies. Fully underwritten policies will order records depending on the age of the insured, the amount of coverage, and most importantly based on your medical history.

The insurance carrier will order your APS (attending physician statement). They may request records from your primary doctor and/or a specialist. This will be based on your medical history. Insurance companies like to see regular checkups (annually) for older applicants. They get nervous if you haven't been to the doctor for years. They also like to see that you comply with your doctor's orders.

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5. Underwriting- Insurance carriers won't send your application for approval until they have all of the information they want. There is usually a preliminary look at your application once your application and exam (if required) are received. The underwriter will order the database checks and any APS's they need to make a decision. They may ask your agent questions at this time, or request that you fill out a form giving them more information on a subject.

Sometimes after receiving your primary doctor's records, they may decide to order an APS from a specialist. Every case is different.

Although you will pay less for a fully underwritten policy, it can take much longer than simplified issue final expense coverage. That's because with final expense insurance, your application, phone interview and database checks are all that is usually needed.

6. Approval- Your underwriter will make a decision on your file and your agent will be told. You can be approved, postponed or declined. 

Senior life insurance policy approvedApproval can be at the rate your agent quoted, or can be better or worse. Insurance carriers will give you the best rate possible according to their guidelines.

If you are approved at a more expensive rate than we quoted, we will know why. Then we can see if that's the best you'll do, or we may be able to go back to the insurance company and see if we can get them to improve your rating. We have an independent underwriter who can talk to the insurance company underwriter to help us. Most agents cannot talk directly to your underwriter.

Postponement means the insurance company wants to wait a period of time. You have a chance to be approved at a later time. For example if you have surgery or some tests scheduled, they will want to wait until after and include these results in their decision.

You will be declined if the underwriter feels your case is too risky for their guidelines. This doesn't mean you will be declined by all carriers. Sometimes this gives us a push to a different type of coverage or company.

7. Accepting Your Policy (or not)- When the insurance company approves you, they are offering you coverage at a certain price. Now that ball is in your court.

Accept- If you are happy with the terms of the policy, you can accept it. That requires signing some forms, and paying your first premium.

Modify the policy- Before you accept the policy, you can request a change. For example, you may decide you want more or less coverage, a shorter or longer term, or several other changes. If so, your agent will go back to the carrier to have the changes made. If you request less coverage or a shorter term, that's easy. If you request more coverage or a longer term, or change to a permanent policy, your underwriter will have to look at your file and give the okay.

Decline- If you change your mind and don't want to accept the policy, you can refuse it, for any reason. Any premiums that you have paid up to this point will be refunded. Additionally, most states have a free look period where you can decide to return the policy and get your premium back. It can be anywhere from 10 days to 30 days depending on where you live.

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Bottom Line

Senior citizens particularly need help in getting the best VALUE because there are so many variables that come into play and so many options for insurance. To get the best life insurance for seniors we suggest you talk to an independent life insurance agent who specializes in the 50+ crowd. 

.                     Free eBook                     . .             Life Insurance 101               .Download Baby Boomers Guide to Life InsuranceDownload Final Expense Life Insurance Handbook