Many seniors lack any life insurance coverage or discover too late that the seemingly affordable term life insurance is no longer affordable. An excellent alternative to term life policies and not having any life insurance is taking out an affordable whole life insurance policy. One mistake that seniors potentially make is having the assumption that there are no affordable whole life policies. Independent insurance companies, like Trusted Choice, are a good place to start your research. However, even large agencies like Fidelity Life and Mutual of Omaha carry low-cost options. If you're a member of AAA, you also have the opportunity to purchase life insurance from them. Make sure to check out your club affiliations since many senior oriented organizations give members access to benefits like insurance.
Many insurance companies provide whole life insurance policies to seniors who have health issues. Seniors should read the terms before purchasing a whole life policy to determine details regarding seniors with health issues.
Whole life insurance continues for the life of the policy, until the insured dies, cancels the policy or fails to make timely payments. Unlike term life insurance, costs associated with whole life insurance often continue at the same rate for the life of the policy. Another advantage to whole life insurance is that the policy accumulates cash value that the insured can borrow from should an emergency arise. For many seniors, a whole life policy seems cheaper overall and a better option.
Like with any other purchase, consider the details before making the purchase. Considering whether the cost of the policy increases over time or stays the same, if health plays a part in acceptance or cost of premiums and whether the policy provides the amount of needed or desired coverage are factors to consider when seeking cheap whole life insurance coverage for seniors.
Although premiums of many whole life policies remain the same, age is a factor in the cost of premiums. Insurance companies list premium costs by age brackets. A senior who procrastinates about life insurance at 64 likely discovers at age 65, that the individual is now in a more expensive age bracket.
Some people believe costs related to life insurance are higher than the actual costs. Bankrate explains that the nonprofit Life Happens discovered that 80 percent of Americans "Have the wrong idea about what life insurance costs."
Many people likely opt for term life insurance for the initial attractiveness of the policy. For seniors, many of whom live on a fixed income, the low initial cost of a term life policy likely seems more attractive than a whole life policy. However, a term life insurance policy is only for a specified number of years. The person must renew the policy at the end of the term, likely at a considerably higher rate than the original policy.
When an individual dies, monthly social security benefits cease. The SSA death benefit paid to the beneficiary is a one-time payment of $255.
Unfortunately, many seniors either are underinsured or have no life insurance. PRWeb points to the fact that seniors need at least enough life insurance to pay for burial costs. The cost of a funeral and burial typically range from $10,000 to $20,000. Without life insurance, the costs fall on loved ones. Additionally, some loved ones discover that debt owed by their deceased loved one sometimes falls on family members.