Seniors, especially those between 60 and 64, are the fastest growing segment of the population in Canada. In general, seniors number to nearly 5 million people in this country.
As a result, seniors are a vibrant and growing market for life insurance. Plus, they are living longer and are much healthier than they used to be, so it’s possible, if you are a senior in good health, to qualify for a traditional life insurance policy. The premiums will always be cheaper the better health you’re in. In fact, if you are in excellent health and have an equally excellent family health history, you will likely qualify for preferred rates, which will give you at least 30% off the regular premium price. To buy a traditional plan also means that you may get two to three times the coverage than what is offered by guaranteed issue or simplified issue plan at a much cheaper price. Of course, the older you are the more expensive life insurance is, but traditional life insurance is usually available for individuals up to the age of 80.
Of course, if you have health problems, it is still possible to get life insurance coverage through a guaranteed issue or simplified issue plan. A guaranteed issue plan has no health questions or medical tests, such as a blood or urine test, as a barrier toward an approved life insurance application. Instead, applicants are approved immediately. However, coverage amounts are considerably less than what is available from traditional life insurance plans and the premiums are considerably more expensive. For example, the benefit amount is rarely beyond the range of $5,000 to $50,000 and the premium is often up to 400% more in cost than the premium that comes with a traditional life insurance plan. Often, the coverage only doubles or triples if you die under the very specific circumstances that qualifies you as having an accidental death, but less than 2% of applicants actually die by accident. Besides, unless the death is by accident, the coverage amount is limited to a return-of-premium, plus interest if the death occurs within the first two years the policy is in use.
Simplified issue coverage may be the better option for certain situations where your health status is ambiguous, but you’re looking for more coverage at a cheaper premium. Simplified issue policies are simply policies with no medical tests, but definitely a few health questions. The more questions you can answer “No” to, in most cases, the more likely you are to be approved. It’s also a rule of thumb that the more health questions you have to answer, the lower the premium you have to pay. However, the coverage maximums generally top out at $150,000 because the insurance company still must shield itself against potential losses. Of course, there’s still a certain level of convenience to being able to get coverage within a few days without having to go through a medical exam. However, there is the one caveat that if you’ve been declined within the last two years for a traditional life insurance policy, than a simplified issue policy would not be available to you.
It is for this reason that most qualified insurance brokers recommend that you apply for a simplified issue policy first, so you at least have some coverage in the event that you are declined when you then go and apply for a traditional life insurance policy. If you are approved for the traditional policy, you can then use your existing simplified issue policy as a back-up form of coverage, or to supplement (top up) your traditional life insurance coverage amount. This gives your family more financial options and flexibility when you die. They are also not stuck without financial support in the event you were not approved for a traditional life insurance plan.
It’s also important to get sound insurance advice and buy your policy from an independent insurance broker, rather than direct from the insurance company via their call centre. You will often pay a higher premium if you buy direct, as an insurance broker has access to a variety of different insurance companies, so they are better able to find a plan that will more closely fit your coverage needs and your budget. They can also better guide you through the underwriting process if there’s something you don’t understand or are confused about. They will also be able to advocate on your behalf to the insurance company during the underwriting part of the application if the need arises and they can make sure that everything is in order for your family when it’s time to receive the payout of coverage.
Generally, what the current market is really showing is that life insurance is still an option for senior citizens at almost any age, so don’t let the fact that you’re getting older prevent you from looking into life insurance as a whole. There are still many options available to you. If you’d like more information on any of the above policy types, or would like to explore these options further, please call 1-866-899-4849.