Term insurance could be a good short-term solution.
Seniors Term Insurance is term life insurance marketed directly to seniors usually as a means of covering final expenses.
However, term insurance only covers you for a stated term and duration. It can be for a stated number of years, such as ten 20 or 30 years or to a certain age, such as term to 75, which expires at age 75. If one is looking for coverage for final expenses, they must pass away within that term in order to be covered. Of course, this term may be shorter for seniors given the unlikelihood that they will live for another 30 for 40 years.
Term insurance also does not build equity in the way whole life insurance does for seniors and if the insured lives past the term, renewal can be up to three times more expensive than the initial premium was. Thankfully, you can purchase a term policy with a renewal option. This way you can insure that the term renews automatically at a more reasonable rate. Seniors term insurance doesn’t always have fixed premiums. In fact, when it’s for seniors, the insurance company tends to up them every few years, so make sure that you buy a term policy with fixed premiums. There may be renewal features if your term policy has a renewal option, such as the possibility you can convert it to a whole life plan, which will give you insurance for the rest of your life.
You can also get other features such as flexible terms or decreasing term where the premium decreases every year, so you don’t have to pay as much at the end as you did in the beginning. The average price for a premium on term insurance for seniors seems to be around $200.00. But, as it says above, the terms are generally shorter when marked for seniors. For example, The following is a list of the top four carriers for $150,000 of Term 15 coverage for a 65-year-old, male non-smoker:
AXA Assurance Term 15 loan insurance – $197.78 a month
Assumption Life Flex-Term – $198 a month*
Industrial Alliance’s Term 15 – $202.50 a month
* The Assumption Flex (Level) Term and Flex (Decreasing Term) Option policies are available without medical tests for insured 18 to 65. For amounts up to $250,000, there are still a series of health questions.
It is completely reasonable for seniors to consider their life insurance options, including term insurance because people are living longer than they ever have before, so it’s reasonable to consider that they may outlive the initial term and need to have an automatic renewal option. On most policies, there are no medical exams required, but their could be a few health questions. The policy itself doesn’t necessarily have to be used for final expenses.
You can use it for a particular expense with a particular shelf-life, such as a mortgage, a grandchild’s college tuition, a particular loan or some credit card debt, managing estate taxes, long-term care – although, long-term care insurance can and should also be used for those medical care needs – and a life insurance trust. In many cases, term insurance is affordable for seniors and can be used for many different financial needs and family situations.