What Is Senior Life Insurance?

While most life insurance is designed to care for your loved ones after your death, senior life insurance is different. This type of insurance is targeted specifically for people over the age of 55 to pay primarily for funeral expenses. Because insurance is so expensive at this age, seniors often find it difficult to put protection in place if they neglected to do so in their earlier years. However, senior life insurance is designed to provide the necessary protection people need.

When obtaining senior life insurance, there are typically not a lot of medical questions or a physical examination needed. On the contrary, the insurance company knows there is a very real chance you will pass away during the term of the policy. However, the term runs from age 55 (or older) to 75, so there are many people that will live past the age of 75 and not collect on the insurance. Also, because the payouts on these policies are relatively low, the company is still able to provide coverage and make a profit. This is good news for seniors that would not qualify for insurance though a regular policy.

The most common benefits of senior life insurance are fixed premiums, which are usually not available at this age with regular insurance; a fixed death benefit; a guaranteed cash value on whole life policies; and no medical exams. These are rare in insurance policies, as most lower the death benefit as someone ages or increases the premium, but most senior life insurance have fixed rates. However, more importantly, is the ability to obtain life insurance at an age when most other policies would be unavailable.

Many companies claim to offer senior life insurance; however, when it comes down to it, many applicants are denied based on their age or the premiums are ridiculously high and, therefore, unaffordable. The good news is there are companies that actually provide insurance to seniors at affordable rates. There are even some that offer higher benefits for individuals that want them if they are willing to take a medical exam. Coverage for funeral expenses may not necessitate an exam, but higher benefit rates would.

Although high benefit amounts are available, many people choose to go with a lower amount. The reasons for this vary; some individuals may not want to go through a physical examination, but the more common reason is that at this age, most people are already relatively financially secure. Because they will not need an additional income, a basic senior life insurance policy offers enough coverage for funeral expenses and the remaining spouse, if there is one, can continue to live on the nest egg the couple already had in place. On the other hand, they may not have a spouse, in which case there is no one that really needs to be cared for.

Some seniors try to obtain insurance in order to provide an inheritance for their adult children. While this is not typically the purpose of life insurance, it is a strategy used by many. However, high benefit senior life insurance is usually so expensive that this approach may be counterproductive. If you are in the market for senior life insurance, you should carefully consider your intentions and what options you have available.