Life insurance for seniors doesn’t have to be expensive. Just because you’ve been around the block a few times doesn’t mean life insurance companies should take advantage of you. Am I right?
The good news is that if you are senior you can probably obtain life insurance for a lot less money than you think. That’s because people are living longer and staying healthier than ever. Because the risks to insurance companies are lower, prices for term life have really dropped. You might be surprised just how inexpensive this coverage is these days. And you can take the following 5 steps to drive prices down even lower:
1. Don’t Buy Too Much
Your life insurance needs change over time. Typically, as people age, they need less insurance. That’s because they usually have fewer financial obligations. The kids are hopefully out of the nest. The house might be paid off or close to it. And hopefully your retirement investments have grown. If any of these describe you, you probably need less insurance today than you did a few years back.
You can save a bundle by simply not overbuying. Having too much insurance is a mistake I see many people make. Make sure you know how much life insurance you really need before you go shopping.
2. Working For A Living
If you are still punching a clock, you might be able to participate in a group plan that your employer offers. If she doesn’t offer such a plan, use some initiative and suggest that she set up such a program. The boss can pass all the costs on to the staff if she wants to. If so, it would be a wonderful employee benefit that is completely free to the employer.
If your employer does offer a plan, find out if you can maintain the policy once you separate from service. Many plans do offer that option. A group plan is almost always going to be the least expensive option so look into this alternative first.
3. Become a “groupie”
Even if you aren’t still working, you might be able to join other groups that offer life insurance for seniors. Contact groups that you are active in and find out if they offer a group life plan. Look into other groups and consider joining if they provide such options. AARP offers a plan and it might be worth looking in to. But proceed with caution. Not every group plan is worthwhile. You should always verify that the offer is attractive by comparing term life insurance quotes.
4. May the Quotes Begin
Different life insurance companies price age groups very differently. It all boils down to underwriting. That means some life insurance companies will be more competitive and offer better prices than other companies. You can take advantage of this by getting lots of quotes (or talking to an agent who knows which company is going to be the best fit for you – like me). The nice thing is that it doesn’t cost you a thing to get quotes (or talk to yours truly) so take advantage of this resource.
5. Insurance of Last Resort – Kinda
There are two kinds of life insurance policies that I normally don’t recommend – whole life and guaranteed issue life insurance. But in cases where cheap term life insurance is not available, both of these might become options.
With whole life, you might be able to structure a policy that doesn’t build up much cash values. If you do that, in essence you bought yourself a term life policy. Depending on your age and health condition, this approach might work.
As a last resort, consider guaranteed issue life insurance. This is a policy that most people can buy regardless of age or health. These companies take just about anyone – but the death benefits come with strings attached. First, you can’t buy a great of coverage. Typically you can buy at most $100,000. Also, you have to survive 2 or 3 years in order for the policy to take effect. Finally, the premiums are usually high.
As you can see, if you are a senior and need life insurance, you have options. First, make sure you really need insurance and if so, get clear on how much you really need. Next, try to get the coverage through your work or a group you can join. Then, get plenty of quotes no matter what. This keeps everyone honest and it will help you make a smart decision.