Life insurance is an important investment in the lives of many adults, especially seniors. While we do our best to make sure that we’re taking care of our final
expenses ahead of time, life is unpredictable.
Some seniors have taken out life insurance policies that are too small or don’t pay enough to cover their family’s financial needs after they die. Other seniors have purchased a life insurance policy only to find out later that it was too expensive and didn’t provide enough coverage. This can lead to financial stress and confusion if the policies were not properly reviewed before being purchased.
In fact, it could be argued that such false information perpetuates a major public health problem for our aging population.
This growing problem is driving up costs for insurers, which are ultimately passed on to consumers in the form of a higher premium rate and deductibles. All of this makes the need for accurate information even more urgent.
Being misinformed about senior life insurance is not our fault, and fortunately, there are solutions available.
Here’s what you need to know about the senior life insurance industry.
Seniors are a Vulnerable Market
Many people do not understand that seniors are a very vulnerable market. Their financial assets are limited, and the level of need for help is greater than what most would expect. And because the competition between insurers is already so brutal, oftentimes life insurers would go to dubious lengths to get that extra leg up.
This means that people from the insurance industry will often use scare tactics to get them to buy coverage. As long as they sell it, this is fine with them; but, there are many instances where it’s not okay.
This is one of the main reasons why we advise any insurer pursuant to shop around for life insurance policy contracts for a while, instead of accepting the first policy offered to them by their agent or broker.
If you are an insurer pursuant, you should never allow yourself to be pressured into buying something you don’t want, especially if you don’t know what you’re getting into.
As a rule of thumb, refer to the American Council of Life Insurers (ACLI) for reliable information. The American Council of Life Insurers has a list of insurance companies that can be trusted.
The American Council of Life Insurers also offer information for when you’re looking for a casualty insurer, a health insurer, a disability insurer, or other relevant professional services.
Furthermore, many seniors still see life insurance policies lapse. While it is true that life insurance policies are not renewable, they can be reinstated.
We understand that there are some seniors who would rather let their coverage lapse than pay the additional premiums, but this is a very bad decision.
When you have been in the workforce for years and have had a stable financial history, your premium rate will most likely be lower than what you would pay if you did not have coverage.
Many life insurers will require you to make an initial payment to re–activate your policy. If this isn’t done, then your coverage will lapse again and you will need to start over. If you don’t know what the terms of the policy are or if they can be reinstated, it is important that you read through them before making any commitments. Also keep in mind that there may be a penalty involved with making a new purchase when one has lapsed. It is important to understand all of these factors before agreeing to anything.
Research All the Options
We all know that researching is a crucial process when it comes to making a purchase. It‘s also critical when it comes to purchasing a senior life insurance policy. When you‘re looking for senior life insurance, make sure you do your research before making any commitments.
It‘s not enough to just decide on the coverage level and coverage amount that you want; you need to compare those options with other providers so that you can be sure that you‘re getting the best value for your money.
One of the biggest mistakes insurance-searching persons make when buying senior life insurance is selecting an investment plan based on price alone. You may think that if the price is lower, then it must be better, but this is rarely the case.
If you want to make sure that you get the best deal possible, we recommend researching prices at different companies so that you can get an idea of what other customers are paying for their investment plan and how much coverage they‘re receiving in return.
There are state-regulated programs on the market that can offer up to $35,000 towards funeral costs for individuals who qualify. Though not everyone does, it’s in your best interest to take a look for yourself. Your life insurance company hasn’t informed you about these programs for their own reasons. For those who qualify, the savings are significant.
It’s not uncommon to feel misinformed or lied to when reading the fine print of your current life insurance policy. However, life insurance is not the kind of situation that has any room for confusion. When it comes to ensuring that your family is safe in the event that you’re no longer living, it’s wise to be sure you understand your policy completely.
In only a few minutes, policyholders can determine whether they’re getting the best rates, cash values, coverages, and monthly premiums.
Enlist the Help of Agents
You should always have financial professionals who can provide you with the information you need to make an informed decision during the application process. This help can come from a licensed agent, broker, or another type of financial advisor.
Of course, you will have to let your agent charge fees for this service, which will thin out your wallet. However, there are many things that they will be able to tell you that you won’t find on your own.
The kind of information you can glean from an agent includes, but is not limited to: What kind of policy would be best for your needs? Are there any particular risks that might increase your premium? What will happen if the policy lapses? What does it mean if the policy is a guaranteed renewable product?
It is important that you are able to answer these questions so that you can make an informed decision. An licensed agent or broker can help you with this, and work out a plan that fits your needs best. A financial planner will also guide you through the necessary application process.
Life Insurance Benefits for Seniors
Most life insurance policies only cover the cost of one’s death. If an insured person dies, they don’t get to benefit from the money that they have paid into the policy. This is because the benefits are usually limited to surviving spouses and dependent children.
Many seniors assume that if they buy life insurance, they will be able to benefit from their assets beyond just handling funeral costs.
However, the reality is that there is a wide range of benefits a senior citizen can have from investing in a policy. In fact, many times the family of the deceased may actually receive more money than they would have if they had never purchased a policy in the first place.
There are three key benefits from life insurance claims that a senior insurance applicant can expect:
1. Long–Term Care Insurance
Long–term care insurance provides benefits to pay for the cost of long–term care. This includes in–home care, nursing home care, assisted living facilities, and other long–term services and supports.
Long–term care benefits can be a good choice for seniors who have a medical condition that require assistance. However, if the insurance applicant has a more severe medical condition, such as a terminal illness or dementia, this may not be the best option for them.
2. Financial Assistance for the Elderly
Some people might not realize that if a senior citizen loses their job, they may be entitled to financial assistance from the government. As such, it’s critical for them to have enough life insurance coverage in place to cover these expenses until they are able to get back on their feet again.
Seniors often think that when they retire, they will live off of their savings and investments, but this is rarely the case in reality.
It’s not uncommon for them to face hardships during retirement, which is why having enough life insurance coverage can help solve these problems by providing them with a lump sum payment upon death so that their loved ones don’t have to worry about making ends meet.
This is particularly important for them to do if they have a large mortgage or are in debt, because it can help them avoid foreclosure.
3. Blanket Disability Insurance
Many seniors will purchase life insurance to provide a blanket benefit in case they become disabled.
Blanket disability insurance is a form of life insurance that pays benefits to the beneficiary if the insured becomes disabled. This could include any type of physical or mental disability, such as an injury or sickness.
While it’s true that the benefit amount is not as high as some other types of life insurance, it’s still a valuable tool for those who want to ensure that their loved ones are taken care of financially in the event that they become disabled.
The Downside of Senior Life Insurance Policies
Because people are living longer, life insurance rates have started to decrease. However, usually a senior life insurance company doesn’t want their customers to be aware of this. As a result,
many individuals are overpaying for their insurance premiums.
Not only are they overpaying, but plenty of policies don’t fully cover the insured until 24-months after an insurance applicant’s submission date.
This practice is far from fair. It only adds to the challenge of having to shop around for policies and be subjected to exclusionary medical exams.
Take the time to look into whether you qualify for this state-regulated program. You could stand to save a great deal of money, receive discounts, and protect your family by providing them with what they’re going to need in the future.
Checking your eligibility is completely free. More than 50% of qualified seniors receive life insurance coverage from the day the application was submitted, not years later. There’s no obligation and no waiting period, so there is nothing to lose. Simply see if you qualify and start saving from there.
Final Thoughts
It is undeniable that insurance is a major investment in the lives of many adults, especially seniors. Though it’s never too late to start planning for your future, it’s best to get started as soon as possible.
It is one of the best ways to provide for your family in the event that you no longer have any source of income and aren’t able to work anymore.
Hopefully, this information will help you better understand life insurance and make an informed decision when it comes time to purchase a policy.
And remember that if you’re not sure what to do, you can always shop around for help from professional services, such as an agent or broker. These licensed professionals will assist you in figuring out an insurance plan that will finally give you some peace of mind.
