best life insurance for seniors

Is it Too Late? All About The Best Life Insurance for Seniors

You’re never too young or old to start thinking about life insurance.

Young adults often decide to buy life insurance, due to major responsibilities they are about to undertake. A new marriage, buying their first house or starting a family are some of the key reasons for taking out a life insurance policy as a young person.

But that doesn’t mean older folks don’t need to know about the best life insurance for seniors.

Don’t forget, older people have similar responsibilities: home mortgages, dependent spouses, children, and grandchildren. Unfortunately, the obligations you assumed when you were younger don’t just evaporate as you age.

For that reason, turning 80 doesn’t mean you’ve outlived your use for life insurance coverage.

Read on to find out more about the best life insurance for seniors.

The Best Life Insurance for Seniors

The good news is that you can still find life insurance options at an older age. Luckily, many life insurance companies offer policy choices to people of almost any age.

Some insurers offer term policies to people in their seventies and provide whole life policies to those up to age 89. Finding a life insurance policy that gives you and your family peace of mind is easier than you think.

While these options are available to you, it’s important to educate yourself about the best life insurance for seniors and the different policies available.

No matter your age, you want to be fully clued up about life insurance for seniors over 80, to find the exact right option for you.

First Things First

One of the first things you need to decide is how you and your loved ones will benefit from life insurance coverage.

As soon as you have an idea of what you want, it’ll be an easier process when choosing the best senior life insurance for your unique situation. This grasp on your and your family’s needs will delegate the most suitable way forward.

We’ve compiled a list of some of the main reasons to get life insurance for seniors over 80.

Reliant Dependents

Have you thought about how you would provide for your loved ones if you passed away? If the answer is no, you’re not alone. It’s hardly an easy thought.

But it is a thought worth your attention.

Many people will have to wrestle with the idea of providing financially for their loved ones if the pass away. But for some, this question is more complicated.

You may have particular concerns if your dependent has a disability or special need that prevents them from working. Similar concerns are true if your spouse is beyond working age or if your grandchildren are still in education.

These days, the state of the economy has meant many children move back home at an older age and may still require financial support from their parents.

The Dreaded D-word

Debt – another subject that’s not nice to talk about. But unless you deal with it, your debt could hurt the people you love most.

Unfortunately, many reach retirement age with debt, which can reduce or cancel out the amount your family will inherit from an estate.

If your loved ones are not in a position to handle your debt, they may risk losing assets themselves. Could your family pay off your mortgage with you? Would your estate lose much of its value if it had to handle your debts first?

If this is the case, life insurance coverage can help.

Business or property ownership

Family spats or inheritance taxes may force your loved ones to liquidate a business or property after an owner passes away.

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A reason for this may be: if you have most of your money tied up in assets necessary to run a farm or family business. In other cases, you may want to leave your business to one child and give other children an inheritance instead.

Some of these problems can be solved by the proceeds from a life insurance policy. This financial security has the potential to iron out your stressors and bring you peace of mind in your twilight years.

Final Expenses

If you have concerns over your final expenses, you’re not alone.

Today, funerals can cost several thousand dollars – a burden you want to keep from the family you leave behind. To prevent this burden, a final expense policy may help your loved ones plan a dignified burial without added stress.

When purchasing life insurance for seniors over 80, the last thing you want is for your survivors to be caught between honoring you in the way they feel fit and the potential financial burden the funeral could cause.

No Tax Transfer

A huge benefit of life insurance policies is that the death benefit isn’t considered taxable income.

This means you can use life insurance to leave your loved ones money even if you’ve reached retirement age with modest assets.

Immediate Cash Needed

A costly and time-consuming probate process can be avoided through good estate planning.

Your heirs can collect the death benefit from a life insurance policy almost immediately after providing the insurer with a death certificate.

You could help your children or spouse avoid extensive financial problems by guaranteeing them a life insurance death benefit. This is especially true if you have a complicated estate or if there’s a potential for legal challenges.

Whole vs. Term

While reviewing which coverage makes sense, it’s essential to delve into the whole or permanent life insurance benefits offered by the insurance company.

Generally, you will be told that term life insurance is the less expensive option. While this is often true, it may not be true for people over the age of 80.

You see, as people grow closer to their nineties, the difference in cost between term and permanent insurance policies get smaller.

T’s & C’s

It may surprise some to find out that the terms and conditions for a whole policy are often more lenient than those for a term policy.

Some insurance options will also have programs to improve your rating, thereby reducing your premium.

This means that as a senior buying life insurance in your 80s, considering a permanent policy is often beneficial. This is not to say that a term policy will not work.

But most seniors will want a policy to last their lifetime – and you cannot buy life insurance when you’re over 90.

Ten-Year Limit

If you’re in your 80s, the only term policy available to you is a 10-year term policy. If you have a loan that’ll be paid off in less than 10 years, a term policy will work for you. However, once this loan of obligation is completed, you may decide you want to keep the coverage.

Under these circumstances, a choice of permanent or whole coverage would’ve made more sense.

Agent knows Best

The decision between term and permanent coverage will be made much easier if you know what you want to accomplish by investing in life insurance. An independent life insurance agent will help this process along.

If you know this info, your agent can work with you to determine which coverage will fit your needs and budget.

Next, will you qualify for that sort of policy?

If the answer is yes, good news. And if not, your agent will help guide you in understanding why not and what alternatives are available.

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Further considerations need to be discussed with an agent, as there are various factors important to your decision.

The Small Text

For example, you may not realize insurance companies each have slightly varying underwriting guidelines.

This means that you may qualify with one company but be declined (or rated higher) with another. Importantly, you should ensure your agent has experience with seniors over 80.

They should be able to discern between the various companies, to guide you toward companies best for you in your senior years.

Additionally, it is critical to remember that some policies require a medical exam while others do not. The state of your health, chronic medication use and amount of coverage needed will all play a role in determining your decision. Your agent should always advise on the reasons behind your decision.

The advantages of Whole life insurance include the following.

Charitable Causes

Everyone has the choice to donate money to a charity or worthy cause when they pass away.

Some folks decide as they age to create a legacy by donating some or all of the proceeds from a life insurance policy to a favorite organization.

Charitable giving can also provide income tax benefits while you’re alive. A generous donation will entitle you to an income tax deduction. Note here that tax laws are subject to change, always consult with a tax advisor in these cases.

Cost stays put

The amount you pay your insurance company each month will never go up.

This amount (your premium payments) remain level, meaning these premiums will be more affordable in the long run.

While whole life premium payments in the early years are sometimes higher than those for term life, the advantages are most significant as time goes by. For retirement planning, this would mean lower costs and guaranteed availability of life insurance in your more senior years at a fixed cost.

Fixed Beneficiary Benefit

The decisions you make now will affect your final years and even beyond that. They will determine whether you’re able to provide financially for loved ones when you’re no longer around.

A death benefit is a guaranteed amount of money designated to your heirs. This amount will remain constant, as long as premiums are paid. In other words, it’s a financial product that stays in place for your entire life.

Tax Talk

Whole life insurance ensures various tax benefits for you.

In addition to the tax-free amount you’ll secure for your heirs, your cash values grow on a tax-deferred basis. The tax-free assets you leave to your family or causes will be quicker to access than other assets when you’re gone.

So, while property and other aspects of your estate will be subject to taxes and will possibly take time in probate court, life insurance isn’t part of that package.

Final Facts

Finally, if you’ve had your permanent policy for long enough to build up a cash value, you’re able to use that money in a tax-advantaged way as part of your retirement’s financial set.

This means your whole policy can be effectively used towards a supplementary retirement income.

Unlike retirement savings accounts, your cash amount will not be impacted by fluctuations in the market. While this has an impact on the amount of money you’d leave to your beneficiaries, it’s another guaranteed asset you could rely upon.

Please feel free to continue reading our posts, including the five types of insurance everyone needs. We’re happy to answer any questions relating to the best insurance options for you.