Life Insurance and Seniors
Life insurance is a hot topic for adults, regardless of how old they are. However, more and more, senior citizens find themselves wondering whether or not they need life insurance. If so, what type of life insurance should they purchase? There are several different things to consider when it comes to making this decision and it isn’t one that should be taken lightly.
I’m a Senior – Do I Really Need Life Insurance?
This is a question that many seniors who may not have had life insurance in the past ask themselves. Is life insurance really necessary for me? Maybe, but maybe not. If you are in a position where you have money set aside already for funeral expenses, you have a good amount of savings and you’re debt-free then odds are you may not need life insurance. However, if find yourself with one of the following circumstances, then you may want to look into your options:
• You have debt and want to ensure that there is money in your estate to cover the debt
• You want to leave your family with money to cover funeral and burial expenses
• You have a higher net worth and you want to use your life insurance to cover any possible tax consequences
• You would like to leave a donation to charity
• You want to ensure that your spouse or dependents are provided for
• You want to leave behind a legacy
All of these reasons are understandable, however, taking the right steps to ensure you can accomplish your goals is key.
What Type of Life Insurance Am I Eligible For?
This is an important question. The answer is different depending on the situation that you’re in. Here are some examples of the different types of life insurance that you may be eligible for:
• Term life insurance
The leading benefit of this life insurance is the fact that it’s the least expensive option. The downside is that if you’re over the age of 80, you will likely have difficulty being approved for this type of plan because it will only cover you for a set period of time and requires a medical exam.
• Whole life insurance
A reason why so many people opt to go for a whole life insurance plan is because there is a cash value to it that you can tap into once enough value in the plan begins to grow. However, the premiums for a plan like this tend to be more costly.
• Guaranteed issue life insurance
This is a popular option among seniors because there is no medical exam requirement. However, the issue is that there is a two-year waiting period from the time that you start the plan to the time it would become available. Also, the coverage tends to be on the low side.
Factoring Your Life Insurance Into Your Estate Plan
Your life insurance will play a critical part when it comes to your overall estate plan. For example, if you do decide to follow through with purchasing life insurance, it’s imperative that your beneficiary designations remain up to date. Although in most cases, a person will want to leave the proceeds of their plan to their spouse, it’s possible that their spouse may pre-decease them. Then what? Having primary beneficiaries and secondary beneficiaries is important to ensure that your life insurance proceeds are distributed in the way that you want.
If you have any questions regarding life insurance or you’re ready to build your estate plan and incorporate your life insurance into it, we encourage you to get in touch with us today. We can help you revamp your estate plan or build a new one that has all of these considerations in mind. Don’t wait. Give us a call today!