Where can I get affordable term life insurance for seniors?

What is Term Life Insurance?

Term life insurance is temporary life insurance coverage that lasts for a certain period of years. It is usually sold in increments of 10, 15, 20, or 30 years. Once the threshold of years is completed, the term policy expires.

A prospective insured must qualify for the coverage by being in an acceptable health condition, be of a good moral character and be financially capable of paying for the policy.

Senior citizens can purchase term insurance, although it will cost more at older ages than it does when people who are younger purchase term life insurance.

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–Different Types of Term Life Insurance

There are different facets of term insurance that serve different purposes.

• Level Term Insurance – the premiums stay level, and the death benefit stays level until the years of the term coverage expire.
• Decreasing Term Insurance – The premiums stay level, but the death benefit decreases each year until the policy expires.
• Annual Renewable Term Insurance – The death benefit stays level, but the premiums increase each year as the policyholder gets older.

Term Life Insurance For Seniors

Term life insurance for seniors still might be a good alternative. It will certainly be cheaper than whole life. Whole life combines a cash value feature which is designed to keep the premiums level on the policy.

Keeping in mind that term life insurance can have level premiums, but the policy will expire sometime before life expectancy.

According to most companies, life expectancy is age 100. Most term life policies will cover a person until age 85, but no further.

A good strategy might be to purchase a term policy that has convertible features.

If a term policy is convertible, then it can be switched to a permanent policy at any time during the term regardless of a person’s state of health.

Most term policies are convertible until age 65. If a term policy is purchased prior to that age, it could be converted to permanent insurance just before age 65.

For example, if a senior at age 70 purchased a 15 year, level term policy that might be a good strategy to pursue.

The initial costs would probably be affordable, and the policyholder would have the security of knowing that the term policy would be in force until age 85 when it would expire.

How To Compare Rates

There are numerous quoting websites on the internet where a person can check on rates. This is at best a haphazard exercise as far as getting your particular rate because it is not easy to plug in how you will be rated on the premiums.

At an advanced age, say past age 55, it is likely that you will have to have a physical exam at the expense of the life insurance company.

The exam is pretty routine, as you will have your blood pressure checked, you will give a blood sample and a urine sample.

From that exam and your health history will come an evaluation by the insurance company which will result in your premium rating. It will either be preferred, standard, or rated higher than standard.

However, online quoting services can give you an idea of which companies are competitive, so it is worth some time experimenting with those sites. It doesn’t hurt to window shop a little, so you are aware of what is available.

Work With A Life Insurance Broker

It is always a good idea to work with an experienced life insurance broker. A good broker will be connected with more than just one company, and he or she can give you a good idea of what is available.

The broker will also know more about the companies such as servicing capabilities, special perks of policies such as medical riders and advanced death benefit provisions.

Another advantage of working with a broker is that he or she will have lots of experience and knowledge in the area of planning and beneficiary designation.

It would seem that this would be an easy area, but that is not always the case. The knowledge of proper beneficiary designation along with possible settlement options can be very good information to have.

The Problem With Term At Older Ages

In the previous example where a person who is age 70 purchased a 15-year term insurance policy, it seemed to be a solution that might fit a typical situation.

The reason a 15-year plan is given as the example is that that is probably the longest any life insurance company will issue a policy.

What a tragedy it would be if that 70-year-old were to pay the premiums for the 15 years, the policy expires, and the individual dies at age 86. That is the drawback of term life insurance.

Term life insurance will only pay during the time that it is in force, and once it expires there is no more coverage.

–Possible Remedies

One remedy would be to go ahead and purchase the term insurance for 15 years and purchase an additional whole life policy for an amount that would cover final expenses.

At least if a person were to outlive the term insurance, there would be some life insurance benefit for burial.

A person could purchase a policy called Guaranteed Universal Life. This is a combination of a low-cost permanent plan, but there is very little cash value, making the cost of the plan very low for a permanent plan.

The amount of coverage might start at $50,000, but it is worth looking into for the sake of having insurance in older ages.

What if My Health is Bad?

If you are a senior with poor health, your options become slimmer for the purchase of term life insurance.

Depending on age and what the health issues are, it is not impossible to purchase term; it will just be more difficult and costly.

There are agencies that specialize in substandard life insurance, but you have to be careful and patient. This is another area where a good broker can be of immense help.

This process will just take more time, and you won’t know the outcome until your application is submitted to several companies.

–Guaranteed Issue Policies

If you are in very poor health, there are companies that will issue policies on a guaranteed basis. Usually, there is no death benefit for the first two years, and then the full death benefit kicks in.

If you die within the first two-year period, the premiums are refunded to your beneficiary along with 10 to 20 percent interest.

In Conclusion

Term life insurance for seniors can be an attractive solution because of the price, and if an applicant is in good health, it is fairly easy to purchase. There are plenty of companies from which to choose, and you can get a good idea of what is available online.

Hiring a life insurance broker who is experienced is a good idea because you get more information about the various companies and more in-depth information in the area of planning.

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