Financial Planning With A Permanent Policy
How much does Whole life insurance for Seniors cost? Do I need it? Is it the same thing as Burial Insurance?
In this article we are going to pull back the curtain and give you the skinny on these insurance products and how they work. Second, how you can cost effectively insure and see your final needs, wants and wishes are met when you are unable to.
Leaving this world costs a lot of money. Does not seem quite right, but yet it is one of the largest expenses we will be responsible for. However we do this, it is important that we have a financial plan in place to cover the large expenses that result due to death.
Maybe you have questioned yourself… how am I going to prepare for the inevitable and where will the money come from? Am I going to cause a lot of added financial stress for my loved ones upon my death? Do I want to leave monies behind to care for those most important to me?
Most people do not want to leave a financial crater for their loved ones in a time of extreme grief. The mere fact you are checking into that here today suggests that you do not want that either.
Senior Whole Life Insurance Protects Your Family
Whole life insurance for seniors is affordable insurance that can cover the cost of your death and other related, financial matters.
The insurance itself is designed typically for people in their “golden years.” Often there are little to no health questions depending on the size of the policy.
Coverage is offered by many life insurance companies. It is an alternative to a prepaid burial plan with a funeral home which has inherent risk and requires an upfront, cash layout.
For many, personal debt, funeral and burial costs are a very large expense to overcome. If that is your case, you are not alone.
With senior whole life insurance, your first premium covers you right away. In some cases…those seniors who have very serious health conditions may have a limited benefit period where they do not have full benefits. An example of this type of coverage is offered by Colonial Penn Life Insurance Company. Their guaranteed acceptance life insurance product shown with paid spokesman Alex Trebek is an example of this. In this example, the first two years, coverage is limited to accidental death. For natural death, coverage is only premiums paid in plus interest. Be aware and certainly a reason to talk to a senior specialist agent.
Your family is going to be saddled with final expenses without proper planning one way or another. Death is certainly very hard for the remaining family we leave behind. They are already struggling with saying goodbye and moving on emotionally. The financial impact of death can leave some families having to completely change their lifestyle or be financially ruined.
Leaving your family member(s) with a potential mountain of debt does not need to happen. Final Expense Insurance or Burial Insurance can take some or all the financial burden off them. Only you can decide how devastating the financial impact will be.
A good specialist agent or agency that works regularly with seniors can help you with the considerations.
With that said, adjust to your financial needs accordingly. Maybe you have everything completely paid off and financial resources to easily afford this large expense.
Be mindful that if you have the money laid aside to cover funeral and burial costs, that there are more expenses to consider. One important one is…do you have a someone who is quite dependent on you? Furthermore, do you have any outstanding debts? Credit card bills, mortgage or final medical bills? These are also very typical expenses that a final expense policy can be used to cover.
Ask yourself a couple of reality questions…
What kind of changes will your passing and absence bring to your family? Do you want to leave a legacy behind? Will a loved one have to hire some help or return to work? How are all my bills going to be satisfied?
These are all things to think about and plan for while you can.
So What Does It All Come Down To?
When you hear about a Burial Insurance plan or Final Expense Insurance, whether it is directly from an agent or thru a funeral home utilizing a licensed life insurance agent, you are really talking about the same thing, just 2 different names. Burial Plan terminology is typically more focused on funeral expenses. Final expense policy terminology is a more complete funding of the loss of your life and the complete costs associated with it.
A final expense policy is a senior whole life insurance policy that encompasses full funeral, burial costs as well as outstanding debts.
You may have also heard of or considered a prepaid burial. This is something you typically purchase at a funeral home versus having insurance. Problem there is… you have to put all the money on the table, upfront. If the cost is $8000 then your out $8000. These businesses can and do go out of business. Either way, that money is now gone and unable to work for you any longer.
Final Expense Policies
Final Expense Insurance is almost the opposite of a prepaid burial arrangement as you are transferring your “risk” of death to a life insurance company in exchange for a preset, but permanent premium (typically) to age 100.
At any time after acceptance the insured passes on, the beneficiary (set by policy owner) will receive the full amount of the policy, tax free. Whether you have made one monthly payment or 120+, it does not matter. The full coverage is paid out as your needs are fully insured as long as the policy remains paid up.
Since Final Expense coverage is also used to cover any outstanding debts that may remain upon the passing of the insured, a Final Expense/Burial Insurance policy helps ease the financial burden placed on a family when a loved one passes away. Remember that these expenses will also be stressful for the remaining family to pay for.
The life insurance/final expense industry has numerous competitive carriers who issue policies designed specifically for people age 50-85 (issue ages) that will cover you permanently. Typically, these policies can insure you up to $50,000 with some exceptions. Term insurance is sometimes a useful option as well, but will not be permanent and never the solution.
Being “old school” so to speak and working with a very large number of senior citizens since the late 90’s, I advise considering traditional “simplified issue products” with limited health questions if you want to skip the medical exam requirement. They are still affordable and give you some savings just for answering some very basic health questions. Click here for a list of the basic questions to qualify for this coverage.
Now, if maximum savings or higher policy amounts are needed, we can look at a full, medically underwritten traditional life insurance policy with a medical exam. This will likely produce the best offer for you, but will require a bit more work upfront to secure the coverage. Most senior citizens tend to opt for simplicity, but the savings may make some sense to others who don’t mind the additional delay and red tape. We recommend you consider all your options.
Guaranteed Issue Whole Life Insurance For Seniors
There are also many people with a health predicament with a poor outlook for the foreseeable future. In that case, Guaranteed Issue final expense plans are available, but we advise against them until last resort. The premiums are more expensive than simplified issue plans and sometimes result in insuring less than your family’s needs. If your health outlook is not insurable otherwise, you may have to accept the more expensive but guaranteed issue products that we do offer. About 10% of our clientele have policies like this.
Guaranteed Issue policies often have the label of Burial insurance. Why?
Because it is often the only option other than a prepaid burial plan at a funeral home when an applicant has a terminal condition. There are no health questions to answer as part of guaranteed issue application.
Now, there are two basic benefit tiers available with Final Expense/Burial/Funeral Insurance plans:
- Level Benefits which means the full face amount (full payout) of the policy will be in-force the day the application is approved. Coverage is permanent as long as premiums are paid in full.
- Graded Benefits which has a typical 24-month or more “waiting period” before the full face amount of the policy is in available. Should death occur to the insured, the insurance companies will return all paid premiums and interest to the beneficiary of the policy. Interest paid by each life insurance company varies for this type of coverage, but 10% is frequently posted.
Graded Life plans are for those people with real shaky health. It is generally a very high risk standard.
Controlled High Blood pressure is not typically an issue.
Some things just develop with age and are not an issue for obtaining the optimal coverage and rates. Again, click here to read the health questions for a simplified issue final expense policy here. They are a form of Guaranteed Issue Life Insurance plans (age range is 45-80) because they require no health questions. For someone with a serious health impairment this could be the only insurable way to go. The premiums will be higher but for someone who cannot get approved for any other type of policy this will make sure your family is take care of.
In order to qualify for a Level benefit plan, an applicant can have some typical impairments and/or health issue that is controlled via medications or other. There are many types of impairments out there and this is why we should speak prior to running quotes.
Children with elderly parents often ask the question if they can purchase life insurance on their parents.
If that is you, yes, you can be a policy owner and the beneficiary of a final expense/burial plan with your parent(s) as the insured as well. Your mother and/or father must sign the application (done electronically or over the phone thru voice signature) and most carriers will call the proposed and insured and do a quick interview to make sure they understand what is taking place.
As people age, the cost of senior whole life insurance does increase to apply for. There is simply more risk to the insurance company as time goes on. Once accepted, the rate is locked for life.
How Much Coverage Can I Get?
Most senior life insurance companies that offer policies “no exam” policies will only cover a person up to $50,000. There are a handful that will issue up to $100,000 in death benefits but we actually recommend alternatives for death benefits greater than $25,000..
What if I need More than $25,000 of Whole Life Insurance?
Since most companies will only go up to $50k in face value for simplified issue whole life insurance, it is hard for some people to obtain coverage that meets all their needs.
Sometimes, we have to bundle two policies to get the job done. Just depends on your financial planning needs. Another option you can consider is trying to obtain a guaranteed universal life insurance policy (GUL). Coverage amounts will be much higher and premiums considerably lower as these policies do not accumulate cash value like whole life insurance does.
GUL policies are another form of permanent life insurance, but not a subject to discuss in depth here. These policies are ideal for those who will be carrying a large amount of debt, someone creating a legacy or a family whose estate is quite sizeable and may face some pretty hefty taxes after their death.
Who Needs Senior Whole Life Insurance?
Whole life insurance is a tried, true and dependable way to give your family the money that they need to pay for expenses when you are no longer with them.
The money is received tax free by your beneficiary as a general rule.
Whether the policy will pay for a funeral, burial and the debts that remain after the passing of the insured, these plans just make a lot of sense and bring piece of mind that can help your family move on with their lives.
Nothing will ever replace the life lost, but having financial plan in order relieves a tremendous amount of stress as they move on and adjust. Whole life insurance for seniors can vary wildly in qualification requirements. There are even many guaranteed acceptance designed for even very ill people.
Most of the time, whole life insurance for seniors is an affordable type of coverage. At the same time, certain offerings may not be the best option for your needs. If you do need the financial protection, it is important that you’re getting the best coverage you can obtain. An important key to understand, don’t assume apples are apples with whole life insurance policies.
For many years we have had many senior citizen clients purchase whole life insurance from us. If you financially planning as a senior, this is a very viable option for you.
The numbers often work well in your favor.
Most of the time, no medical exam is required, which means that we don’t need to send a nurse to give you a paramedical exam so no needles or waiting for the knock on the door.
Occasionally we have clients who wish to minimize their premiums and purchase traditional life insurance instead which includes the exam in your home. More time and red tape applying is downfall of this option.
If you are looking for simplicity and don’t need too much money for coverage, these products are a simple, straight forward solution.
Affordable Whole Life Insurance Quotes
In order to get the best whole life insurance quotation as a senior, your age, sex and health will be the primary deciding factors.
You are encouraged to find a seasoned independent agent or agency that can shop your coverage with all the top life insurance companies that cater to the elderly. If you are looking for an affordable whole life insurance quote you are looking to have your case shopped out by a professional who has access to the top insurance companies for seniors.
While some companies may not be able to accept you, another carrier or two may be fine with any health problem you may be having.
The key is to try to always qualify for full, immediate benefits and guaranteed acceptance policies unless there are no other options.
We can help you do that
As I close this article, I would certainly recommend you discuss these matters with a independent agent who specializes in senior benefits.
This is someone that can help you sort out the significance of your health and point you in the right direction of the best solution for your needs. An agent who works with senior citizens knows the market for these products and understands health troubles often experienced by folks in their later years.
Be clear, there is no best insurance company or plan regardless of what has been purported on the internet, television or radio. Every situation is unique especially as we age. We can shop the market for you for the best life insurance for your needs regardless of your health. We have the expertise to find the top offers to meet the financial plan you working on.
Sometimes senior cases are challenging to navigate by anyone other than a specialist, it seems prudent for me to make this suggestion whether “biased” or not. Give us a call 269-244-3420 send an email or simply use of instant quoting tool on the right side of the screen. Let us know if you have a tough medical condition. Our team knows who to shop your case. Obtaining the coverage you need to protect your family with while being affordable is a goal we are sure you have. Let us help you and your family be prepared.
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