Obtaining a life insurance policy beyond the age of 60 years old can be expensive, due to the fact that generally the older you are, the higher the cost will be to be covered for life insurance. Due to the changes in our economy, today most retired people may not have enough savings to cover expenses and may still have ongoing obligations like a mortgage or car payments. Unfortunately, there may not be enough to cover their debts or to cover for the cost of a funeral when they pass away.
Getting Coverage After age 60
In addition, past age 60 many people have developed major health problems, take many medications, and are are more likely to have large amounts of medical expenses and bills. This adds much more pressure on the individual to look for coverage, however at the same time, most traditional life insurance companies will not cover serious pre-existing conditions, so this leaves many older people with limited options.
Thankfully there are policies available that are designed specifically for seniors that are facing these types of situations. Final expense insurance can provide guaranteed life insurance, or funeral insurance, for seniors who are concerned about not wanting to burden their family once they pass away.
Whole Life Option with Affordable Premiums
Final expense policies are basically whole life insurance policies, generally with much lower coverage amounts. This means that the life insurance policy will stay in force by paying premiums, or by having the policy “paid up”. Most final expense policies come in two different caregories, and the most beneficial part about choosing this option is that they usually do not require a medical exam. Seniors who are in relatively good healthy may still apply for a standard life insurance policy, and may receive a better rate and higher benefits as well.
The general face value on a final expense policy for seniors usually ranges from $2,500 to $25,00, many life insurance companies will offer a simple issue option, as well as a guaranteed issue option. Due to the fact that the face value is much lower than traditional life insurance, this helps insurance companies also lower their risk and provide insurance to many people who generally would not be accepted during a traditional underwriting process.
Since there are much less requirements, most seniors are able to find
affordable coverage and have peace of mind that their family can take care of everything when they pass away. Seniors can use final expense insurance to leave this money to a beneficiary, usually their spouse, children, family member, or friend, to cover burial expenses, settle any debts, as well as leave some money as an estate when possible.
Simple Issue Insurance Provides Immediate Coverage
Simple issue life insurance policies for seniors provide immediate death benefits as soon as the policy is enforced. These type of policies do ask some basic health questions on the application, but the majority of seniors can qualify most of the time. The most common reason to be turned down for a simple issue life insurance policy is if the applicant is terminally ill, has cancer, kidney failure, or permanently lives in a nursing home.
Less severe health issues like diabetes, or high blood pressure will usually not prevent someone from obtaining coverage. Since this type of policy is immediate, as soon as the insured person pays their first premium and is notified that their policy has been issued, they will be covered right away. The benefit of going this route is that elderly people generally feel more relief to know that they are covered day one and that can provide immediate peace of mind.
Guaranteed Issue Insurance Guarantees Approval
The second type of common final expense life insurance policy is a guaranteed issue policy which do not ask any health questions at all! So this is a great option for individuals with serious health conditions, they are still able to find coverage, and be covered down the road.
The downside of these policies is that they delay full coverage for a period of generally 2 to 3 years. If the insured person passes away during this qualification period, the insurance company will refund all premiums to the beneficiary with a specified interest rate. So going this route can serve as a type of savings account, or as an insurance policy, either way it is a win-win in the end.
If you are facing retirement soon, or if you are concerned about paying final expenses for your aging parents, you may consider a final expense or funeral expense insurance policy. Many find that it is much easier to pay an affordable monthly premium, than to come up with several thousand dollars for unexpected funeral and other expenses that come up when people pass away.