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Life insurance options for seniors

As we grow old our options with life insurance become scarce. Many insurers still avoid insuring individuals over sixty years of age. Further, even if you find an insurer who would offer you a policy the premium charged on that would be outrageous. So, are you uninsurable?

Certainly not, though the options are limited you can still find life policy that would offer  required coverage. Currently, many insurers are setting separate underwriting guidelines for the seniors to qualify for life insurance.

However, even when the seniors may qualify for the traditional life insurance, the cost of coverage would still remain their concern. Therefore, we need to identify the alternatives available to them, which could allow them to remain covered at reasonable expense.

Funeral/final expense plans

Final expense policies are typically designed to cover the burial expenses. Normally, issued for limited face value. The final expense policy would accumulate cash-value which the policy holder can leave behind for his/her heirs.

• The premium rate would remain constant for the period of the plan.
• It would accumulate cash-value, which you can leave behind for your heirs.
• The coverage offered by the plan is permanent.

Guaranteed issue life insurance

Anyone can qualify for the guaranteed issue life insurance since it requires no medical underwriting. However, these plans offer lower death benefits than the traditional life insurance plans. But the premium that the insured is required to pay is high. Moreover, some guaranteed plans might have the clause that would restrict the benefit pay-out if the insured dies within 24 or 36 months from the commencement of the coverage.

Premium financing

In premium financing large financial institutions finances the plan taken by the senior. The financier expects to get higher return on these policies than the traditional investment vehicles.

Premium financing requires no out-of-pocket (or nominal) expense from the policy holder. If the insured dies within the tenure of the plan, the investor then would get the premium paid by him refunded along with interests, when the beneficiary of the policy would receive the tax-free death benefit.

Life settlement

Life settlement is an option that would allow the seniors to get rid of their unwanted life policies. Life settlement involves selling the policy to a third-party, where the third-party would become responsible for paying the future premiums.

In the agreement of life settlement the seller receives immediate cash while the buyer becomes the beneficiary of the plan.