There are many different types of life insurance available. Some are more reasonably priced than others. When buying coverage for an elderly person, it’s advisable to get a permanent policy, because you want it to last for their lifetime, just like Medicare.
After decades of writing policies, here are the top three affordable life insurance plans for the elderly. These are objective and timely if you’re a senior that’s serious about your health. The policies we review below are types of policies, and with the right agent, you should be able to get the one that’s right for you with no problem.
Here’s what you’ll learn below:
- Top 3 affordable insurance policies for seniors or elderly.
- How to decide which policy is best for your needs.
- What price range each policy fits into.
Number one is a whole life final expense insurance policy.
The policy face amount ranges from $2,000 up to $40,000. This is the only type of permanent policy you can get with a face amount of less than $25,000. If you want more than $40,000 of insurance you would have to apply with 2 or more insurance companies. You can purchase these policies through age 89 (depending on your state). These policies can be in force within a few days of applying.
Policies like these are easy to get. They do not require any physical or blood testing which makes them very desirable to many people. To qualify you must be able answer no to a number of medical questions. The insurance company will check a prescription database and the Medical Information Bureau to confirm your answers. The premium and the policy face amount remain the same for your lifetime.
There are two types of final expense policies.
- Level benefit. There is no waiting period for this type of policy, meaning, once the policy is in effect, the insurance carrier will pay the full face amount in the event of a death.
- Graded benefit policy. When the applicant answers yes to certain questions, they may be able to get a graded benefit policy. This means the benefits faze in over 2 or 3 years. For example, you may get 30% of the face amount in year one, 65% in year two and 100% in year three.
Number two is a guaranteed premium universal life insurance policy.
This is the least expensive permanent policy available. You must have a policy face amount of $25,000 or more. These policies will be structured to keep the premium and the face amount level for your entire life. These are available through age 90 depending on your state and the amount of insurance. As you get older, less companies offer policies. These policies take at least 6 weeks to place in force. Getting doctor records can take several weeks and make the process even longer.
This type of policy is very flexible and can be structured so that it doesn’t accumulate any cash value, keeping the monthly premium lower. This type of policy requires complete underwriting. This means you will have to have a paramedical exam where they will take blood and urine samples. You will have to give a full medical history and your doctor records will be ordered.
The third most affordable insurance policy is a guaranteed issue policy.
This type of insurance policy is more expensive than the two previous ones. There are no medical requirements for a guaranteed issue policy. Only purchase this policy if you can not qualify for either of the others. This type of policy is available through age 80. That said, it still offers you final expense coverage.
The maximum amount you can buy is $25,000. If you want more coverage, again you would have to apply to more than one carrier. There is a two year waiting period before the full amount of the policy is paid out. If the insured dies during the first two years, all premiums paid plus interest are returned to the beneficiary.
You may notice that term insurance is not one of our top three.
This is because when you are older term policies will usually not fulfill your goals. In fact, most term policies cannot even be purchased over age 80, and only 10 year level term policies are available. If you want to protect your family financially, cover final expenses, leave money to pay debts, etc., term insurance is not the right vehicle. Permanent coverage is affordable and protects your loved ones for the rest of your life.
About the Author:
Lenny Robbins has spent his entire business career in financial services. He was a VP of Oppenheimer & Co., Inc. prior to starting his own securities broker/dealer. In 1991 he founded LifeNet Insurance Solutions which specializes in life insurance for seniors (https://www.lifenetinsurance.com/) and baby booomers.