Seniors and Life Insurance: Preparing for the Future
A lot of insurance websites gear their information to younger individuals shopping for affordable life insurance policies. This makes sense: were the unthinkable to happen to someone who has just started a family or bought a home, financially protecting loved ones is important.
Life Insurance for Seniors
As we age, our thoughts and lives shift from getting married and starting families, to building businesses, downsizing, and planning for retirement. Life insurance is an integral part of every step of your journey, as a life insurance policy is the cornerstone of financial security and planning for your family’s future once you’re gone.
For seniors, the reasons for buying life insurance are much the same as they are for those in their 30s. In this post, we take a look at why preparing for your future is important at every stage of life, but is especially important for seniors.
Debts and Expenses
The main purpose of a life insurance policy is to pay off debts and expenses once you pass away. For seniors, especially, this is important. Thanks to progress made by modern science, our lifespans are increasing. This means that you will likely be well into retirement years before you pass. The average lifespan for Americans is 78.5 years of age!
At this point, you will most likely have paid off your mortgage and maybe even have considered downsizing. Chances are, your children are in school and have taken on their own debts, and you probably have a nest egg saved for retirement.
These reasons – and more – are precisely why you need life insurance.
Let’s take a look at some debts and expenses that seniors may wish to cover with a life insurance policy:
- To cover medical expenses. An unfortunate truth about aging is that you are more susceptible to illnesses – illnesses that could land you in the hospital. Medical bills are expensive and add up quickly. Life insurance benefits can help your family pay off your medical debts (debts that may be passed onto them once you’re gone), and certain riders can even help you pay down those debts while you’re alive.
- To cover funeral costs. The average cost of a funeral in the United States can run between $7,000 and $12,000. That’s quite a bit of money for the average person, particularly for retired seniors. There are quite a few insurance options that cater specifically to burial and final expense insurance; however, you should always look at your whole financial picture before choosing one of these life insurance policies.
- To cover home and mortgage costs. If you share a home with a spouse or partner, you need a life insurance policy. Even if you have already paid off your mortgage before passing away, homes incur quite a bit of expenses. Utilities and household maintenance can add up quickly, so we recommend a life insurance policy to help your spouse or partner during an emotionally difficult time.
- To replace your income and supplement your spouse’s retirement budget. This is particularly important for couples. Seniors who are retirement age are often living on a limited budget. You may want to ensure that your income is replaced after you pass so that your partner is financially secure. For single seniors without dependents, options like whole life insurance or certain standalone riders are good options to provide a low amount of coverage at a reasonable rate.
- To leave a legacy for your children. Life insurance can also be used to create an inheritance for your children and loved ones. Your beneficiaries can use the policy payout to pay your funeral expenses as well as to pay off their own credit debts, mortgages, school debts, or to set up funds for their children.
- To boost your financial security. Some life insurance policies, like whole life insurance, give you the option to borrow against the policy if you are in dire financial straits. Other options, such as long term care riders or disability riders, provide you with financial protection should you need long term nursing home care or at-home care. These riders may also offer the option to pay you out if you are disabled and unable to work.
Additionally, if you own a small business, life insurance can help protect your company if your business partner passes away. This way you are preserving your financial assets until you decide to sell or pass along the business.
- To pay off any credit card or additional debts. Credit card debts, car payments, and business loans can all be paid off using a life insurance death benefit. According to Consumer Finance, once you die, your debts do not simply disappear. Frequently your debts are inherited by your estate. A life insurance policy ensures that your estate and your family has enough to cover any expenses left after you’ve passed away.
Life Insurance to Protect Your Family At Every Stage
The life insurance industry is constantly evolving, and there are more options than ever for seniors and individuals over the age of 55. A common misconception is that your premiums will regularly increase as you age, or that you won’t be able to find a policy tailored enough for your and your family.
While premiums may slightly increase as life expectancy decreases and health problems become more prevalent, it’s important to remember that your risk is not the same across all carriers, and that the fear of undergoing a medical exam should not prevent you and your family from getting the financial protection they deserve.
If you’re a senior looking for life insurance, you should give us a call. We’ll take the time to get to know you and your unique financial situation, helping you find the best policy at the best rate.