Life Insurance For Seniors Over 80
Life insurance for seniors over 80.
There are two types of life insurance for seniors over 80 depending upon the amount requested and the health of the proposed insured. Final expense policies only require answers to health questions, while larger amounts are fully underwritten. Many final expense policies ask different questions so an independent agent can help you find the policy best suited to you.
When shopping for life insurance for yourself or if you're a younger family member looking for someone else there are things you need to know to make sure you recieve the best value for your premium dollars. Did you know the cost of the average funeral today is over $7,000. Life insurance can take away the worry about what will happen when you or your loved one passes away. Here's how!
What are my choices?
What's the purpose of the coverage? Will it cover the cost of a funeral? Will you leave behind any debts? Do you want to leave a lump sum to any family members? These are some things you will have to decide to determine the amount of insurance you will want to buy.
When you think about getting life insurance for seniors over age 80 you can only consider permanent life insurance as term insurance is no longer available at that age! You want a policy that will last for your lifetime, so that's a good thing!
There are a few different types of permanent insurance available. Here we will give you an overview so you understand the basic differences in the policies and the cost.
- Simplified Issue Whole Life is often called Final Expense or Burial Insurance. This type of insurance is a whole life insurance policy. It lasts for your lifetime. There is no medical exam needed. The face amount and the premium remain the same for the life of the policy. You can purchase as little as $2,000 of coverage. Most companies offer a maximum of $25,000 to $40,000 of coverage. If you want more insurance than what is available at one company, you would need to purchase policies from another company(s).
- Universal Life Insurance has many different policy types. This kind of coverage has face amounts that start at $25,000 and go up from there. For senior or final expense purposes we usually recommend a Guaranteed Premium Universal Life policy. As the title states, the premium will remain the same for the life of the policy and the face amount will too. When structured so that there is no cash accumulation, this is most often the best priced type of coverage you can buy. This is a fully underwritten policy, meaning you will have to take a medical exam.
- Guaranteed Issue Life Insurance is a whole life insurance policy. One big difference here is that there are no medical requirements. However, coverage is limited in the first two years. If death occurs in the first 2 years due to any medical condition your beneficiary will receive the premiums paid plus interest. You would be covered for accidental death in the first 2 years and your beneficiary would receive the full face amount. Once the 2 years have passed death from any cause is covered and your beneficiary will receive the full amount of coverage. Policies are usually available in amounts of $2,000 to $10,000. If you want more protection than one company offers, you would have to purchase policies from other carriers. Every application is approved, but you would only consider this coverage if you can't get one of the other types of insurance.
What is the cost?
Let's first discuss the relative costs of life insurance for seniors over 80 and then we will discuss the requirements.
- The least expensive type of coverage is the Guaranteed Premium Universal Life Insurance. This type of policy also requires more from the applicant. The insurance company will determine your rating, which will impact the cost of your policy.
- Next in line is the Simplified Issue Whole Life Insurance also known as Final Expense Life Insurance. There are two types of policies, level benefit and graded benefit. Level is the best option, with coverage starting on day one. Graded benefit phases in coverage over a two or three year period.
- Last is the Guaranteed Issue Life Insurance.
The specific cost for your policy will be determined by the type of policy, the face amount and your age and your rating.
What if you can't afford as much insurance as you want to get? We will help you find the company that will give you the best value for your situation. We suggest you get the insurance that you can afford. If you ask any beneficiary, they will tell you that some insurance is better than no insurance at all! The plan is to protect your family and/or pay for your final expenses. It's easy to see that having even a little insurance will be helpful.
What are the requirements for life insurance for seniors over 80?
- Guaranteed Premium Universal Life- This policy has the most requirements of the three types of policies discussed here. This coverage requires full underwriting. You will have to take a paramedic exam including lab test for blood and urine. The insurance company will order your doctor records. They will check a prescription database and the Medical Information Bureau. You will have to medically qualify for this coverage. (You also must purchase a minimum of $25,000 of coverage). The file will be reviewed by an underwriter who will follow the insurance carrier guidelines to determine if you qualify and at what rating. Your age, the amount of insurance, and your health rating will determine the final price of your policy.
- Simplified Issue Life Insurance This type of insurance does not require an exam, blood, urine, or your medical records. For this reason alone many applicants prefer this kind of policy. You must answer a number of medical questions. Some companies have two tiers for this coverage, preferred and standard. Your answers will determine your rating and the price. Many companies have one level only, where you are accepted for coverage or not accepted. (The insurance carrier will check databases such as the MIB (Medical Information Bureau) and a Prescription Drug Database to confirm that your answers are true. Some carriers also have a graded rating where coverage is phased in over two or three years per a specific schedule. Your premium will be based on your age, the amount of coverage and your answers on the application form.
- Guaranteed Issue Life Insurance This type of policy has no medical requirements. This is the final option available for permanent insurance. If you can't qualify for either of the other policies, this option will still allow you to get coverage. As there are no medical qualifications, everyone can purchase this type of policy. The application approval process has a very quick turn-around time, often days. Understandably, this policy will be the most expensive of the three since they will accept all applicants. Full coverage begins after a waiting period of (usually) two years. During the waiting period, you are only covered for death due to an accident.
Which one should I choose?
Rather than saying you want a certain type of insurance, we suggest you talk to an independent life insurance agent, especially one who specializes in seniors. The process seems straight forward, but you will do best with an agent because:
- Although you may qualify for coverage with one company, you may be declined by another for the same type of policy. Obviously you have no way of knowing which company is your best option, but your agent should! Each application is worded differently, so you may be a decline with one carrier and an approval with another. Also the simplified issue policies don't all ask about the same conditions.
- Your agent will search many carriers to come up with the best price option for the policy type that is best for you. You can't easily determine pricing by yourself on the internet with these types of policies.
- Your agent will assist you in determining which policy will meet your needs and fit your budget too. Your agent will assist you in finding the best policy for you!
- Your agent will make sure you understand what you are buying and what is guaranteed in the policy.
- Many people want whatever a friend or relative has gotten. But is that your best option? Your agent can help you to understand not only the choices, but why one is better for you than the other.
Where do I start?
There are some decisions to be made when you are ready to get life insurance. How much to buy? Can I afford it? (If not, how much can I get for the amount I can afford?) Which policy type is best for me? Which company is best for me? You don't have to do this all alone. Talk with your agent because they are your best resource.
Use your agent to your advantage. Let them use their knowledge and expertise to help you get the most affordable life insurance you can buy. If you have an idea of how much coverage you would like to purchase, your agent can steer you to the best options for your situation. Give you and your family peace of mind knowing that your final expenses are well taken care of.