Most people imagine that the retired phase of life involves only enjoying life without worrying about dependants. However the truth is that, growing old is one of the hardest parts of life since one’s body often starts aging and health problems along with financial problems appear during this phase of life.
However since growing old is inevitable all we can do is to prepare ourselves for the worst and preparing for the worst involves being mentally prepared for death and financially prepared for the worst. Certain types of insurance plans help seniors prepare for various situations in which they or their partner may need financial aid.
Income protection plans for working seniors and term life covers for empty nesters or retired seniors are a must in today’s day and age. The following paragraphs will elaborate on everything you need to know about purchasing life covers for working or retired adults.
Why Life Insurance for Seniors?
Empty nesters often believe that they do not need life covers or income covers because they do not have young children to take care of. However; these people often forget that life does throw surprises at people and being insured also means being protected for the worst. Insurance is a must for those people who do not have a significant amount of assets they can liquefy and use when there are emergencies.
Term life covers offer various benefits to people of all ages however; seniors who have dependants can benefit significantly from these plans. Life covers for seniors ensure that the policy holder can spend his remaining life in peace without worrying about his dependants after he passes away.
Life covers for retirees can ensure that one or both of the partners are insured and when either one of the partner passes away, the other partner has funds to take care of financial affairs such as loans or mortgages. The compensation payout received from the insurer can also be used by the living partner to make ends meet.
Income insurance plans for working seniors can ensure that the insured person can get financial aid from the insurer when he is ill injured and cannot work temporarily due to such problems. Income covers usually protect the policy holder until he is 55-60 years old or until the benefit period is active.
Inflation is an actual threat that we encounter on a daily basis however; protecting oneself from inflation is often a tough task since the cost of living increases faster than the amount we earn. Due to this reason, choosing an insurance plan that accounts for inflation is a must for seniors. As a general rule, you should select an affordable plan that has the highest cover limit.
Benefits of Life Insurance for Seniors
Term life covers can provide your loved ones such as your children, unemployed spouse or partner with a lump sum compensation payment when you pass away. These plans offer a pre-decided payment to the beneficiaries of your estate or will when a claim is filed. If you have selected funeral insurance as an add on benefit then your loved ones may also receive an additional compensation payout when a claim is filed for funeral expenses.
The main benefit of this add on plan is that, your beneficiaries or family members do not have to worry about arranging $10,000 – $20,000 for your funeral expenses since the insurance company will give them the pre-decided once a successful claim is filed.
Income insurance plans protect you financially if you are working and have to take forced leave due to an illness or injury. These plans can pay up to 75% of your yearly pre-tax salary provided you meet the eligibility criteria set by the insurer.
The benefit period of these plans can last for up to 5 years or until you are 55 – 60 years old. The additional perks that are given to you by your insurer can pay for rehabilitation expenses after an accident, accommodation expenses of a relative who needs to stay with you to help you when you are ill or injured and transplant surgery costs. An additional death benefit may also be offered to you if you are eligible.
Cost of Life Insurance for Seniors
Term life covers may cost as much as $30 a month for seniors where as income insurance plans may cost as much as $25 – $40 a month for seniors. Older adults who smoke, have pre-existing conditions or have genetic conditions can expect to pay higher premiums.
Although life covers for seniors cost more than life covers for younger individuals, there are various ways to lower the cost of the premiums. For instance, paying premiums once a year in advance to the insurer is one way to reduce the costs of premiums since many insurers offer a discount on premiums to buyers who pay premiums in advance.
Choosing a longer waiting period and a shorter benefit period for income covers is another way older adults can save money on premiums. Opting for premium loading fees or exclusions for certain injuries and illnesses is another way to reduce the cost of premiums.
Opting for the services of an insurance agent or comparison website is one of the best ways to reduce the cost of premiums since both agents and comparison websites offer deals and discounts to buyers of all ages.
Choosing an indemnity contract for income covers and a term life insurance plan with a short term are a few other ways you can reduce the cost of premiums payable to the insurer.
Limitations of Life Insurance for Seniors
Income covers have a few limitations such as unless specified by the insurer, you will not be protected against loss of job. If you opt for a plan with premium loading fees then every time you file a claim you will have to pay a fee to the insurer, this can be considered as a deductible. Exclusions may make your life insurance or income cover plan cheaper but these premium reduction options also prevent you from getting all the benefits offered by the plan.