What is Senior Life Insurance?
Senior Life Insurance is whole life insurance that is mostly purchased by seniors to cover the costs of funeral expenses and other final expenses when they die. This type of life insurance is still commonly known as final expense life insurance or burial insurance, but senior life insurance is a more pleasant term to hear. A typical senior life insurance policy is from$10,000 to $20,000 of insurance protection. Smaller coverage amounts are also used to cover a lower-cost cremation service. Consider a senior life insurance plan as a mini whole life insurance policy with a specific purpose of covering final expenses. Therefore this type of insurance has the same benefits as a whole life insurance policy
- Can keep the insurance your whole life.
- your policy builds cash value.
- you can borrow against the cash value if you need to if the cash value is large enough.
- the death benefit is paid out to your beneficiary tax-free.
Senior life insurance has gotten very popular since the widespread use of term life insurance. It used to be that young families would buy a large whole life insurance policy to cover their needs and then they kept it in force until they died. Whole life insurance was much cheaper at this time and so it was used in this way. Since the introduction of term life insurance, families have started buying term life insurance in their younger days to cover children, college expenses, mortgage, and other large expenses. Once the caregivers are older and their term policies have ended, they find a small Senior life insurance policy to cover their current needs. This is a much better way to use life insurance because you are changing your life insurance as your needs change, so you are never over-insured, and it is less expensive.
Cost of Burial
Most advertising you see on television from insurance companies like Colonial Penn and AARP or print materials will suggest the price of $6000 for the average cost of a funeral. The average cost of a funeral, however, when all things are said and done is more like $10,000. This is because the price is given in ads and sometimes from the funeral director does not include some hidden fees. The total cost of an average funeral can be broken down into 3 parts: the funeral director fees, the cemetery services, and the headstone. $6000 may cover the funeral director but between the cemetery and the headstone, you may be looking at another $4000 dollars.
Prepaid Burial Plans and Senior Life Insurance
There are advantages and disadvantages of using PrepaidBurial Plans over Senior Life Insurance in order to pay for your final expenses. A prepaid burial plan ensures that your wishes will be specifically laid out on how you want your burial service to proceed. This allows your loved ones to be free of having to plan your service while they are grieving. However, if your burial plan is not fully paid for when you die, or the cost of services increases significantly there may be some overages that your loved ones would still have to pay. Also, if you move your burial plan may not be transferable. The cost of canceling your prepaid plan could be up to one-third of the funeral service cost.
A senior life insurance policy can cover your final expense costs from day one and gives you the flexibility you need for the changes in life. It is important with a life insurance policy that you let your loved ones know in your will what your wishes are concerning final wishes.
How much does Senior life insurance cost?
Senior life insurance can be very affordable. Of course, the younger and healthier you are when you decide to purchase a policy the less you are going to pay. The cost of buying a Senior life insurance policy is less than getting a regular whole life insurance policy and selecting a low death benefit amount. To get a Senior life insurance quote click here.
Do I have to qualify?
The short answer is yes. With all life insurance plans, there is always some level of qualification necessary to be issued a life insurance policy. With Senior life insurance, you have the option to select a simplified issue Senior life insurance policy or a guaranteed issue Senior life insurance policy. Simplified issue Senior life insurance policies ask just a few medical questions to determine whether or not you will qualify and there is paramedical (blood and urine)to be done. Guaranteed Issue Senior life insurance policies ask even fewer medical questions (usually 3 or 4) to determine if you qualify for a life insurance policy. If you are very healthy and take very little to medications, and you want to save money, your best choice would be to select a policy with paramedical underwriting. The more the insurance company is comfortable about your health outlook the lower your premiums are going to be.
If you don’t want the hassle of going through medical underwriting or you may have a few health issues you feel the insurance company may pay attention to, your best bet may be a simplified issue life insurance policy. Just answer a few questions and the insurance company will take your answers, do a little searching on your medical history, and then give you an answer, usually within 24 to 36 hours. Guaranteed issue is an option when there are major concerns about your health situation, so the fewer questions the better. Usually, there are 4 questions to answer in the paperwork, and the insurance company again will make a determination on whether you qualify or not based on your answers and medical history.