Marilyn Katz asked: Term
life insurance policies are very popular these days, and of course, they can provide very valuable protection at a low cost for many people. However, the problem with term
life insurance is that it expires just when the covered person would find it harder to find protection, after ten or twenty or thirty years, the term
life insurance expires. The theory behind term
life insurance is that by that time the insured person will have less obligations, and they will have enough money saved to self insure.
However, we find many senior citizens and retired people who have not had the good fortune to be free of obligations, and with sufficient savings to cover their debts, final expenses, and other obligations. Also, by the time we reach maturity, we may also have developed more health problems. As if an advanced age were not enough, health problems may make us very tough or expensive to insure at all!
However some
life insurance companies have developed senior life, guaranteed
life insurance, or final expense
life insurance programs to meet these needs. These are, basically whole
life insurance policies. This means that the policy will stay in force as long as the policy is kept in force. A policy is usually kept in force by paying premiums, or by having the policy “paid up”. Yes, many whole life policies can be paid up over a period of years, usually ten to twenty years. In this case, an insured person can relax, knowing they will have
life insurance for their whole lives, and not just for a period of years.
These type of senior
life insurance or final expense policies come in two types that do not require a medical exam. For a face value that usually ranges from $2,500 to $25,000, many senior
life insurance companies will offer simple issue and guaranteed issue
life insurance policies. Because the face value is lower, and so the risk to insurance companies is lower, you can find some more relaxed requirements to gain affordable coverage for
life insurance. Seniors can leave this money to a beneficiary, usually their spouse or children, to cover burial expenses, settle final debts, and leave some money as an estate.
Simple issue
life insurance policies provide immediate death benefits. They do as health questions on the applications, but the great majority of seniors can qualify. They usually only declined applicants who have a terminal disease, or are in a nursing home. So smaller health issues will not prevent an applicant from obtaining coverage. Since the coverage is immediate, as soon as the insured person is notified that their policy has been issued, they will be covered.
Guaranteed issue
life insurance policies do not ask any health questions at all! Instead they underwrite by delaying full coverage for a period of months, from 24 to 36, or 2 to 3 years. If the insured person passes away during this qualification period, they will refund all premiums with a specified interest rate. For an older individual with serious health issues, this is still a no-lose deal.
If you are an older person, or if you are concerned about paying final expenses for your parents, consider a senior
life insurance policy. It will be much easier to pay an affordable monthly premiums than to come up with several thousand dollars for a burial and other expenses after the person dies.
