Cheap Life Insurance for Seniors

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Published: 06th August 2012
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*Costs may not be as high as you think. You would think the costs would be out of sight but not necessarily the case. But even seniors with health problems can find life insurance that still makes financial sense for them. Your rates will be higher than if you were younger and in perfect health. Of course, the better your health, the better your rate.

But even seniors with health problems can find life insurance that still makes financial sense for them. Your rates will be higher than if you were younger and in perfect health, but you probably don't need nearly as much death benefit as you did when you were younger -and quite possibly dependent children-to cover.. Now you are older, you probably don't need as much because your needs have changed (no supporting kids, their future college, etc.) and expected life span is less.

The good news: more and more insurance companies offer short- and medium-term life insurance for senior citizens. But there are a few important things to consider.

For one thing, older applicants are more likely to fall into the 'standard' and 'substandard' risk categories. Rates are higher for these risk types.

Also, for older applicants, many policies will not provide a death benefit for the first couple years. If you die in this time, your designated beneficiary will receive the total of your premium payments plus interest. If you die after this initial period, your beneficiary will receive the full face value amount of the policy. Note: You probably won't be eligible for a policy with a large face value amount unless you're prepared to pay an enormous premium.

Another policy option: Final expense insurance. Final expense insurance can pay for burial expenses, as well as outstanding debts and estate-related expenses. The beneficiary has discretion in terms using the funds; pre-need insurance, on the other hand, cannot be used for anything besides funeral expenses.

At 80+, you may have difficulty finding life insurance, but it's certainly worth a shot. Many insurers have found a niche by catering to older applicants.

Different types of life insurance exist for seniors because needs are different (guaranteed life, final expense life.

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However some life companies have developed senior life, guaranteed life insurance, or final expense life insurance programs to meet these needs. These are, basically whole life insurance policies. This means that the policy will stay in force as long as the policy is kept in force. A policy is usually kept in force by paying premiums, or by having the policy "paid up". Yes, many whole life policies can be paid up over a period of years, usually ten to twenty years. In this case, an insured person can relax, knowing they will have life insurance for their whole lives, and not just for a period of years.

These types of senior life insurance or final expense policies come in two types that do not require a medical exam. For a face value that usually ranges from $2,500 to $25,000, many senior life companies will offer simple issue and guaranteed issue policies. Because the face value is lower, and so the risk to insurance companies is lower, you can find some more relaxed requirements to gain affordable coverage for life insurance. Seniors can leave this money to a beneficiary, usually their spouse or children, to cover burial expenses, settle final debts, and leave some money as an estate.

Simple issue life insurance policies provide immediate death benefits. They do as health questions on the applications, but the great majority of seniors can qualify. They usually only declined applicants who have a terminal disease, or are in a nursing home. So smaller health issues will not prevent an applicant from obtaining coverage. Since the coverage is immediate, as soon as the insured person is notified that their policy has been issued, they will be covered.

Guaranteed issue life insurance policies do not ask any health questions at all! Instead they underwrite by delaying full coverage for a period of months, from 24 to 36, or 2 to 3 years. If the insured person passes away during this qualification period, they will refund all premiums with a specified interest rate. For an older individual with serious health issues, this is still a no-lose deal.

Final expense insurance. The most affordable type of low cost senior life insurance policy is called final expense insurance. This is a type of affordable insurance for senior citizens that never expires, that doesn't fluctuate in cost and, importantly, it is one of the few options in low cost life insurance plans for seniors that doesn't require a medical exam.. It will be much easier to pay an affordable monthly premiums than to come up with several thousand dollars for a burial and other expenses after the person dies.

*Differences Between Whole Life and Final Expense Insurance

Most whole life policies, while they are very good, will still require that the person covered have a medical examination performed before the insurance will be approved. In most cases, the insurance company will be able to find something wrong with the applicant: high blood pressure, history of tobacco use, COPD, etc. This means that there may be a significant amount of time before coverage will begin; sometimes as long as two years. With final expense insurance, there is no medical examination required at all. This means that the costs of your funeral are covered, no matter what your medical condition may be at the time.

Term life insurance may be impossible to get for seniors over 80 years of age. Whole life insurance may be extremely expensive for some seniors

*Coverage Rates

Most final expense insurance policies are between $8,000 and $12,000. While they differ from traditional whole life insurance in many regards, what they do have in common with those policies is that the coverage never expires. Once purchased, the coverage lasts until death. This means that you don't have to worry about repurchasing life insurance at a time when no companies may be out there willing to give it to you.

*What to Look For When Shopping for Senior Life Insurance

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In addition to the cost, some other features you should look for include:

* Whether guaranteed renewal of the policy is available.

* What the renewal requirements are. For example, will you need to undergo a new medical exam?

* Whether the premiums are fixed for the full term of the policy or will increase periodically.

* Whether accelerated death benefits are available.

* Whether the premium will be waived in case of disability.

* Whether coverage begins immediately. Some insurers delay full coverage for up to three years. If the insured dies during this time, the beneficiary receives a refund all premiums plus interest.

*Comparison Shop

Researching and comparison shopping on-line is an excellent way of taking advantage of sites that compare quotes from a wide range of insurers. On-line shopping for insurance in this way can mean a better rate. Also, the elderly life insurance applicant is not under pressure from an agent to commit and he or she can consider the options from the comfort of home.

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