As the population in America ages, we are finally seeing a new trend among some in the life insurance industry. Companies are taking another look at seniors and becoming more willing to offer them term life insurance.
This growing interest is sparked by the longer life spans of today’s elderly. When people live longer they are better able to build an investment to help them cover estate planning, burial expenses and paying off their final debts.
Longer life spans combined with healthier living trends lessen the risk associated with insuring the elder population, which had long taken them out of the insurance market. Term life insurance rates for those over 50 or 60 had quite often priced the products beyond their reach. By the same token, seniors are realizing that living longer often means higher medical and other bills. So now companies are gearing policies specifically for the elder market.
The cost of term life insurance for a senior still depends on health and age, and some in the older bracket may still find quotes well above what they would want to pay. Life insurance rates will still spike with age. Still, many people like term life insurance because generally it provides a larger payment at death than other types of savings.
Companies are finally realizing that the seniors of today are vastly different than their parents and are worth the risk. They are healthier and are living longer and have the benefit of modern medicine. So some companies are offering a better deal for seniors.
For example, some term life insurance rates quoted by highly reputable companies come under two separate sets of underwriters’ guidelines. One is for those under the age of either 65 or 70. The other is for those over that dividing line. Costs are still higher than they could be, but these are positive signs.
These life insurance companies are liberalizing their thinking on such issues as family history, blood pressure, cholesterol numbers, height and weight.
One company, for example, allows an elder with a total cholesterol count of 300 to still qualify for a preferred rate, while another permits blood pressure rates as high as 150/90 for its lowest senior rate. There also are companies that will ignore family histories that could have disqualified those in their autumn or winter years in the past, including a parent with cancer or heart disease.
Seniors looking for life insurance typically view it as a way to avoid leaving their heirs saddled with financial burdens upon their death – funeral costs, medical bills, probate, legal fees, mortgages, etc. So they are rightly focused on the size of the insurance death benefit. They are not seeking a new investment for themselves, after all, particularly when the average funeral today, taking into account a cemetery plot, metal casket, headstone, hearse, funeral home or visitation site, and a minister, costs nearly $8,000 and rising every year.
In determining how much or what type of life insurance to purchase, seniors should still consider their age and health along with their own financial situation and goals and learn about their options. If they plan correctly, many older Americans could find that the term life insurance that’s becoming more available to them will help protect their savings since only a small amount of money would go to pay for a larger death benefit.
Thankfully, seniors have other options if they think the cost of life insurance is still too high. They may want to consider paying up front for their funeral costs, or the could buy burial expense insurance, which can pay either a particular funeral home or the heirs. A burial insurance policy is strictly for burial expenses, while a term life insurance plan can be used by the beneficiaries to address other financial issues.
As seniors re-prove their worth, the more liberal terms being offered by some companies represents a trend likely to spread, purely because of the nature of this highly competitive field. The more the better.
The move is definitely welcome. It’s about time life insurance companies realized that the senior population is living longer and healthier and so still has much more to offer all of us.