Pinpointing Affordable Life Insurance for Seniors

No one wants to think that they could die prematurely. This is why people often purchase affordable life insurance for seniors should unforeseen circumstances occur.

Danny Hembrow, a professor at MIT, knew he required insurance coverage as he got married twelve years back. He and his wife, Janet, were planning for children and as per their plan Janet would stay at home to look after them. Since there was only one person earning for the family, they decided to enrol in a policy for both of them.

The couple purchased a ten year term policy that provided coverage for $200,000 each, which required a $120.50 monthly premium per head. This provided the couple the peace of mind they were looking for. Danny says, it is like an automobile insurance, as he never wished they may ever get to use it, but still its presence gives you comfort. The couple had to enrol in another term policy for ten years as the old one expired.

Deciding the Length of Affordable Life Insurance for Seniors

Although the length of the initial plan wasn’t sufficient enough as per their requirements, Danny and his family still decided to pick term policy over whole life insurance. The difference between two basic types of life insurance – whole and term – is that whole insurance is for an entire life with an investment component attached to it, wherein one can build up liquidity tax free.

However, commissions, built in fees, and surrender charges consume a sufficient chunk of the investment, so as per financial experts there are better way to invest money. The premium for whole life insurance is typically ten times to that of term policy. Whereas, in affordable term insurance for seniors, the coverage is for fixed number of years and the insured person just have the death benefit, in return for annual, quarterly or monthly premium.

When a person consults an insurance agent they tend to push you towards whole life instead of term coverage, as they get more commission on whole insurance, but term policy makes a better option. Term insurance makes more sense as; it is there for period till all the responsibilities are met, whereas they can accumulate assets through other options.

A Better Option

Robert Miller, president of National Association of Insurance and Financial Advisors, confirms that affordable term insurance for seniors are a better route. It only makes sense to insure up to the point one requires insurance, and that can be easily done with term coverage besides it costs much less than any other insurance.

Some financial experts recommend guaranteed level premium term coverage, where the premium is fixed for a certain period of time. One should anticipate the period of need and should match the term period with that. For instance, a person with a 2 year old kid should purchase coverage for twenty years, till the kid turn the age of 22, by than the child will be able to earn on his or her own.

However, in certain circumstances it is better to purchase while life coverage. For instance, people who have handicapped children and will be depend financially on parents throughout their life, such parents should purchase permanent coverage.

In the current down trodden economy, Americans struggling with their budget may wish to save money by skipping term life insurance for seniors. As per a study conducted by LIMRA for the year 2010, nearly 30% Americans families do not have any form of life coverage. And eleven million families with children less than 18 years old have no coverage.

But parents who have children living at home should realize that by not purchasing insurance coverage they are putting their kids at unwanted risk, in case an undesirable incidence occurs. In case the parents meet an untimely death, this life coverage will act as a safety net for their children.

However, people who are single, young and do not have any dependents, can put a waiting period before they purchase life insurance. But as we already know, we can never be sure what the future holds for you, one cannot be sure how many kids he or she will have, or whether he or she will marry someday. Nonetheless, as per experts one should enroll at a young age, as finding affordable term life insurance for seniors will be really difficult.

When to Let Affordable Life Insurance for Seniors Expire?

Purchase a term insurance to provide coverage to your spouse and your kids, and let the coverage expire as the kids grow up and you are free from all your responsibilities, as per Bill Wixton, a certified financial advisor. By the time kids pass out from college, a person accumulates enough assets, so they no longer need life coverage.

To determine how much coverage will be sufficient, there are different perceptions among people. Some experts recommend the coverage should at least be five to seven times the salary, while others say it is not sufficient. Insurance agents may persuade you to purchase coverage that is fifteen to twenty times your income, but they are only thinking the interest of the insurance company they represent.