Life insurance policies can be grouped into two basic categories — term and whole or permanent. Term life insurance provides benefits only if the insured dies within the stated period. Its popularity has steadily increased since the mid-1970s, accounting for more than half the total number of life insurance policies sold in the United States annually. Having no cash value, it costs less than the other two types for the same coverage.
What is Term Life Insurance?
Term life insurance is purchased for a pre specified time and once expired, policyholder needs to buy for another term in order to continue the coverage. Return of premium policy lets the policyholder collect the premium they paid till date. Some common terms are 10, 20 and 30 years though there are people who prefer 1 or 5 years term policy as well. It all depends on what a policyholder wants from their life coverage and what length the insurance provider offers.
Benefits of Term Life Insurance for Seniors:
While the elderly are more difficult to insure – indeed, elderly term life insurance was once next to impossible to obtain, but now affordable term policy for seniors is becoming increasingly available. You will find term policy available from every renowned life insurers across the USA.
Getting term life coverage for elderly people involves a great deal of planning in advance. Some insurance companies will underwrite only conversion insurance policies for those over 65 (retirement age in the USA), and may still have concerns over the applicant’s age. Age always plays a vital role when life insurance premium and benefits are concerned especially to obtain an affordable rate. The reason is simple, life insurance companies take the age of the policyholder as a critical factor while calculating the premium. The senior people usually pay higher premium comparing to younger.
One benefit of senior term life insurance is that it costs less than whole life insurance and is thus a better choice for those elderly people who are still in good health and seeking a policy where limits are higher, and whose rates are lower, than those of whole life policies. Term life is also more flexible in that the applicant often has a choice as to term length (which can be as short as ten years) and benefit limits (which can be as high as $100,000), and riders may be added to increase coverage, such as the payment of outstanding medical bills or something to bequeath to the next generation or two. The senior people don’t need to travel everywhere in order to get a term policy as such coverage is offered by most of the insurers either locally or nationally.
Currently, the rates for term life insurance policies are at an all-time low. Thus, elderly people in good health have a good chance of being able to find the kind of policy that they are seeking.
While trying to find out a suitable term policy, one needs to evaluate how much coverage they actually need. You must not purchase additional coverage amount for no use. Thus you must consider funeral expense, educational costs for children, debt/loan (if any), mortgage, spouse care, legacy while calculating a face amount.