Information to Know Before Enrolling in Life Insurance for Seniors

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life insurance for seniors
August 23, 2023 | Johanna Karlsson

Why Life Insurance for Seniors is Different

Some things never change — true love, for example. Other things change all the time, like the role of life insurance, the best life insurance policy for your individual circumstances, and the cost of that important coverage. Before looking for life insurance for seniors, it’s important to understand the exact reasons why do people need life insurance — and why you or a loved one should be especially considerate of these reasons during our senior years.

Insurance needs change with age, and that’s obviously also applicable to health insurance policies like HMO vs PPO plans, which is why it’s good advice for pretty much all of us to regularly review our coverage and make sure our plans are going to cover our medical needs as we age. Part of these evolving needs comes down to our lifestyles, interests, financial security, and health status as we age. So, let’s explore what you need to know before looking for HMO vs PPO plans — and remember that the HealthPlusLife team is always here to answer your questions and help you choose the right plan for your needs.

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Types of Life Insurance for Seniors

There are many different options for life insurance for seniors, each with its own benefits schedule, term, premium structure, and pros and cons. Let’s run through four main types and explain what seniors in particular should know as they think about choosing the right life insurance plan:

  • Term Life Insurance: People of a certain age are often enticed by term life insurance policies because, typically, premiums are lower than a whole life policy. The coverage is straightforward, without the complexities of cash value, and policies can be chosen for specific term lengths to cover temporary needs. However, coverage ends after the term expires — leaving seniors without protection — and a term life policy doesn’t build equity or a savings component because there’s no cash value. Another con is a policy like this can be more expensive, with higher premiums, if a senior renews or starts a policy later in life.
  • Whole Life Insurance: People of a certain age might be drawn to a whole life policy because of its lifetime coverage, not to mention the fact that the cash value accumulation means it builds a savings component over time that can be borrowed against. Another benefit is a whole-life policy’s fixed premiums, meaning rates will remain consistent. But premiums are generally more expensive than term life insurance, and policyholders might face fees or restrictions if they’re trying to make changes or adjustments. Another drawback to keep in mind is that, in some cases, seniors may end up paying for more coverage than they need.
  • Final Expense Insurance: Sometimes referred to as burial or funeral expenses, these policies are meant to cover end-of-life expenses — funeral services, burials, and other related costs. They can be a good option for people with limited savings because these policies will ensure that loved ones aren’t burdened with funeral costs. Seniors with health issues might want to consider these policies as well because they typically don’t require medical examinations or only minimal exams. And because the policy is just for end-of-life expenses, the lower coverage amount ensures the policy isn’t excessive.
  • Guaranteed Universal Life Insurance: Last, but not least, let’s look at the basics of this other option of life insurance for seniors. By combining elements of term and whole life insurance — with lifelong coverage but not the emphasis on cash value accumulation — many people appreciate the flexibility, lack of market risk, and permanent coverage that is possible with these policies. Another benefit is that premiums are generally level, and can be guaranteed not to increase.

Factors to Consider When Choosing a Policy

life insurance eligibility for seniors

Now that you better understand the basic types of policies of life insurance for seniors, let’s next consider the different factors you’ll want to keep in mind as you sort through your options for coverage and choose a policy.

Perhaps unsurprisingly, your health status is going to be a big one here — pre-existing conditions can affect your policy selection options, not to mention your premiums.

Financial objectives are a major part of your decision as well because you’ll need to decide if your goal is to leave an inheritance, cover funeral costs, or provide for a surviving spouse, for example. There’s no one right answer since everyone is unique, so you’ll want to carefully consider your goals and make sure the coverage you choose can accomplish them.

Next, you’ll want to have a good grasp on your budget. The goal is to balance coverage needs with premium costs, ensuring that loved ones will be protected without any remaining big bills while not overspending on a bigger policy than you really need.

Also, you’ll need to make a decision early on if you’d rather opt for a policy with a set term length or instead purchase a permanent solution, such as whole life insurance for seniors.

Common Misconceptions About Life Insurance for Seniors

Navigating the world of life insurance becomes even more challenging when confronted with myths and misunderstandings, especially for seniors. At HealthPlusLife, we believe that dispelling these misconceptions is crucial for making informed decisions. Let’s shed light on some of the most prevalent misconceptions surrounding life insurance for seniors:

Seniors Can’t Get Life Insurance

Reality: Many insurers offer policies specifically tailored for seniors. While age may influence premiums and policy terms, it’s certainly possible for seniors to obtain life insurance.

Life Insurance is Prohibitively Expensive for Seniors

Reality: While premiums can be higher for older individuals, there are numerous policy options and coverage levels available. With proper research and guidance, affordable solutions can be found.

Only Those with Dependents Need Life Insurance

Reality: Life insurance can serve multiple purposes, from covering final expenses to leaving a legacy or charitable gift, even if one doesn’t have dependents.

Seniors with Pre-existing Health Conditions Can’t Get Coverage

Reality: While certain health conditions may influence rates and policy terms, many insurers offer policies with no medical exams or questions. Final Expense Insurance, for instance, is one such option.

If You Have Savings, You Don’t Need Life Insurance

Reality: Even with significant savings, unexpected end-of-life expenses can strain financial resources. Life insurance can provide peace of mind and financial cushioning, ensuring loved ones aren’t burdened.

Term Life Insurance Isn’t Suitable for Seniors

Reality: While term life insurance is often associated with younger policyholders, it can serve as a cost-effective solution for seniors seeking coverage for a specific period or to cover particular debts.

Life Insurance Payouts Are Subject to Taxes

Reality: In most cases, life insurance death benefits are tax-free for beneficiaries. However, some aspects, like cash value withdrawals, might have tax implications.

Tips for Finding the Best Rates

Finding the most competitive rates for life insurance is not solely about cost-saving but ensuring you’re getting value for every dollar spent. At HealthPlusLife, we believe that understanding the intricacies of the insurance market can help seniors obtain optimal coverage at an affordable price. Here are some pivotal tips to guide this journey:

Embrace Health Examinations and Medical Records

  • Why It Matters: Insurers often base their rates on health risks. A thorough health examination can present a comprehensive picture of your health, potentially leading to better rate offers.
  • Medical History Transparency: Being open and honest about your medical history can expedite the approval process and ensure the policy reflects genuine needs and risks. Remember, undisclosed health issues can lead to policy invalidation.

The Power of Shopping Around

  • Market Diversity: Different insurers have varying criteria and risk evaluations. What one company might consider high risk, another might see as moderate.
  • Comparing Quotes: By obtaining quotes from multiple providers, you can compare coverage options and premium rates, ensuring you’re getting the most competitive offer.

Delve into Riders and Policy Customizations

  • Tailored Coverage: Riders allow policyholders to customize their coverage, adding provisions that cater to specific needs, from accelerated death benefits to waiver of premium riders.
  • Cost Implications: While riders can enhance your policy, they may also affect the premium. It’s essential to weigh the benefits against the costs to determine if a rider is a worthwhile addition.

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Call Now (888) 828-5064 TTY 711

HealthPlusLife Can Help if You’re Looking for Life Insurance for Seniors

Now that you better understand your options, as well as the things you’ll want to consider while looking for the right life insurance for seniors, let’s take a minute to remind you again that you don’t have to figure it all out alone. The HealthPlusLife team is always available to help you research options and policies, budget ahead for future needs, and make sure you and your loved ones are protected and covered now and in the future.

Our expert agents are well-versed in life insurance offerings, and we can make this complex decision an easy thing to figure out. It all starts by reaching out to our team to start the conversation. Message HealthPlusLife online or call 888-828-5064. We’re ready to help you.

FAQs About Life Insurance for Seniors

Is it possible for seniors to get life insurance?

Yes, many insurance providers offer policies tailored specifically for seniors, considering their unique needs and circumstances.

Are premiums higher for seniors due to age?

While age can influence premiums, various policy options and coverage levels are available, ensuring affordable solutions for seniors.

What role do pre-existing health conditions play in life insurance for seniors?

While certain health conditions may affect rates and policy terms, there are insurance options available, such as no medical exam policies, which cater to seniors with health concerns.

Why might a senior need life insurance if they don’t have dependents?

Life insurance can serve several purposes, from covering final expenses, leaving a legacy, and creating an inheritance, to making charitable donations.

What is the difference between term life and whole life insurance for seniors?

Term life insurance provides coverage for a specified period, while whole life insurance offers coverage for a lifetime and includes a cash value component.

Are life insurance payouts for seniors taxable?

In most scenarios, life insurance death benefits are not subject to income taxes for beneficiaries. However, certain aspects, like cash value withdrawals, could have tax implications.

How can riders enhance a senior’s life insurance policy?

Riders can customize coverage, adding provisions like accelerated death benefits, long-term care benefits, or premium waivers, ensuring the policy matches specific needs.

How often should seniors review their life insurance policies?

Regularly, especially after significant life events or changes in health status. This ensures the policy remains relevant and offers the needed protection.

Do all senior life insurance policies require medical examinations?

No, some policies, such as guaranteed or final expense insurances, may not require medical exams, making the application process faster and more straightforward for seniors.

Can seniors switch life insurance providers or policies?

Yes, seniors can consider switching policies or providers if they find a better rate or if their needs change. However, it’s crucial to understand the implications and potential costs associated with making a change.

Johanna Karlsson
Johanna Karlsson is a veteran health and life insurance professional licensed in 50 states. She relocated from the countryside in the south of Sweden and has not looked back. After coming to the United States to attend university, she gained her degree in Public Relations. She brought her public relations skills to a local international health insurance where she discovered a new passion in insurance. After years with that company, Johanna now joins HealthPlusLife to help build a team of licensed insurance agents ready to meet your insurance needs.