As people get older, they often look back fondly on their misspent youth. But if you spent your money on toys, vacations, and frivolity, you may end up wishing you’d been a little more responsible and purchased a permanent life insurance policy when you were young, healthy, and eligible for incredibly low rates. Even those that purchased an affordable term policy will likely kick themselves for not paying extra for whole life insurance (and the set monthly premiums that last a lifetime) when the term expires.
The cost of life insurance is based on a number of factors, but age and health status are chief among them. As most people age, they become more prone to illness. In other words, older people are at a higher risk of death not only because our time on Earth is limited, but also because our bodies begin to deteriorate over time. So when you reach the age of retirement and start to think about purchasing a life insurance policy to cover your end-of-life expenses, pay off outstanding debts, and hopefully leave your spouse, children, or other loved ones with an inheritance after your death, you shouldn’t be surprised to find the cost a bit higher than when you were 20 or 30 and at the peak of health.
The good news is that you still have options. Many insurance companies provide policies specifically for the elderly. You might not get the same coverage at the same cost that your children or grandchildren are now eligible for, but that doesn’t mean you can’t find a suitable life insurance policy at a price you can afford even on a fixed income. You will have to do your homework, though, and there are a few factors you should pay attention to when seeking an appropriate policy.
One thing you should look for is flexibility, in both policy and payment options. You don’t want to get strong-armed into selecting a pricy policy that is not only beyond your means, but also provides more coverage than you actually need. You’re better off finding a company that offers add-ons for items like long-term care and accidental death. This way you can decide whether or not you need to pay for extras. Flexible payment plans are another must. When you comparison shop, ask about options for payment (monthly, annually, etc.).
You might also want to look into options like index plans where a portion of your payment goes toward a type of savings. The nice thing about this type of policy is that the provider can take your payment from the savings should you miss a payment, ensuring that your policy won’t be cancelled due to a blunder. At the very least you should find out if companies offer a no-lapse guarantee of some sort. Don’t forget to ask about guaranteed premiums (costs that remain the same for the duration of the policy) and disability waivers that ensure you won’t be dropped if you become disabled and are unable to pay your premiums.
Some seniors are also interested in life insurance policies that require no medical exam. In some cases, these policies will cost you more and the coverage offered may be limited. It’s a good idea if you’re in poor health and you know that the results of your medical exam could preclude you from gaining coverage. When you select a “no exam” policy, the provider agrees to take on additional risk, hence the higher cost of premiums. Ultimately, the choice is yours, but the more options a provider offers, the better chance you will get a life insurance policy you need at a price you can afford.