Seniors who have yet to put insurance into their retirement plan may find that a small amounts of whole life is the best option for protecting a spouse or providing final expenses after they are gone. While many people may have already purchased some form of term policy for the protection of a spouse or children much earlier in life, some may find that have little or no protection that will continue until they are older and provide a benefit for their spouse long after a term policy would have terminated. Considering how long people are living today, it is imperative that seniors with limited resources have something in place before they become uninsurable.
Unfortunately many people think about the need for life insurance well after it is too late and they have already been diagnosed with a medical condition. So, for a senior couple it is important to lock in a permanent life insurance policy that will be there for your entire life before your health deteriorates. Term is inexpensive but it is designed to last only for a specific period in your life.
Why Whole Life over Inexpensive Term
Term insurance typically offers a lower premium in comparison to a whole life policy, these policies are usually purchased during the earlier years of an insured individuals' life. These term types of policies have a specific time frame or term period as the name implies. These policies will usually include renewal opportunities with premiums that can increase substantially as an insured grows older. Often times these types of policies will include a clause requiring new evidence of insurability. So, if you were ill, it might be impossible to get insurance after you develop a health condition or the policy may become unaffordable at a time when you might need it most. On the other hand a whole life policies remains in force, as the policy's name implies, for your whole life as long as you continue to pay the premiums or the cash value remains in force. Term life insurance is usually only renewable to age 75 and terminates at policy end date if not renewed.
Insurance Protection for Older Families
Whole Life plans have several benefits to seniors: Most policies can be written on an insured until the age 85 years of age and can maintain in force until death. Typically when applying for small amounts of whole life coverage you will not have to take a medical exam or have any blood work examined. As you can see, these plans also have greater flexibility to meet age and health history requirements.
Purpose of Whole Life for Seniors
•Funeral expenses also known as Final Expense
•Provide income for senior spouse or child beneficiary's after your death
•To insure coverage to age 100 or guaranteed death benefit to beneficiary
•To build cash value and create a supplemental income stream for retirement
•Children purchase whole life for parents to insure security of other parent
•Insurance for seniors who may have been declined for coverage previously
•To leave an estate or college fund for grandchildren
•Pay off expenses and relieve family of burden
In Addition to a death benefit that is payable to your beneficiary, a whole life policy can also builds up what is referred to as "cash value," or liquid reserve that essentially is a growing tax deferred savings feature that you can withdraw or borrow against. If the policy is purchased early enough or funded heavily in the beginning it can provide a nice retirement resource that can be drawn from at retirement since little can be expected from social security. Many have found this to be a valuable feature if they need additional sources of retirement income to meet daily living expenses. The additional cash value can also fulfill a need for unplanned long term care which is not completely covered by Medicare.
For those married seniors on a fixed budget small amounts of whole life are essential to providing final expense coverage and protecting the remaining loved one for their remaining life at a time they may be unable to go back to work and provide financial support to provide for their own well being. Whole Life was designed to be a simple, fast, and affordable way to secure life insurance for seniors.
Christopher Beard is an independent agent who educate everyone about the devastating costs that long-term care & Final Expense can bring on a family. He is the president of Trinity 1 Financial Group and works with senior clients planning reverse mortgages, final expense , medicare supplement and long term care insurance planning. Request an Online Quote or Consultation