You may think that older people have outgrown life insurance. After all, kids should be grown, houses paid off, and savings built up? Those are nice thoughts, but are probably not the reality for many middle aged and retired people in the US. Recent financial problems have probably cut into savings and investments, and they may have even delayed paying off a home! In addition, many grown children are having their own financial problems, and they are even returning to their parent’s home. Sometimes those grown children bring their own kids with them to live with the grandparents. Clearly, older people in the US still have plenty of responsibility!

Life Insurance Choices For People Over 50

If you need to find life insurance over 50, you should not panic. Since we have had the good fortune to enjoy longer and healthier lives in the US, many top life insurance companies are extending affordable policy choices to older people.

No Medical Exam Term LIfe Insurance – You can find term policies for people in their 70s these days. A reasonably healthy 70 year old with good health habits can certainly find 10 year policies that can provide financial security for another decade. An applicant will have to answer some health questions to apply, but many applications are fairly short and simple.

Final Expense – Final expense life insurance rates are designed to be affordable for many seniors. These products are designed to be affordable ways to plan for end of life events like funerals and settling debts. Any cash left over can be used by the beneficiaries in any way they choose.  Final expense policies, are actually small face value whole life insurance policies, and they come in guaranteed or simplified issue, and these are different. Learn more: Final Expense Life Insurance For Seniors.

Most of the time, these plans do not require a medical exam. Simplified issue will ask a few health questions, but most seniors without a terminal disease, and who does not require nursing care, should qualify! Guaranteed issue plans ask no health questions. However, they may have other disadvantages like higher rates and a waiting period before full death benefits can be paid. In my opinion, guaranteed issue plans should be a last resort.

Universal Life Insurance is a little different, but is also a permanent policy that will not expire as long as it is kept in force. For more information on this innovative product see: universal life insurance explained.

Advantages of Permanent Policies for Older People – Term policies do cost less, but a big reason they cost less is because the insurer does not risk lifetime coverage. A whole or universal policy can provide lifetime security, and it will cover an insured person as long as the policy is kept in force. Keeping a policy in force usually means keeping it paid up! Some of these policies can be paid up over a number of years, and so a person can plan to have paid up life insurance coverage for their retirement years.

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Universal life is the newest form of life insurance and it is also a form of permanent life insurance, like whole life. But it is both more complex, and more transparent than whole life. It is also the most flexible form of life insurance because you can adjust your premiums, and even your coverage amount!

• Permanent Life Insurance – You will have coverage as long as the policy is kept in force. Keeping a policy in force usually means that premiums are paid, or the policy is paid up.
• The insurance part and the cash value part of universal life insurance are unbundled. A portion of your premium pays the life insurance, and another portion can acrue a cash value. This cash value can earn interest at a set rate or be tied to a market index like the S&P 500.
• The cash value may be borrowed against or withdrawn without terminating life insurance coverage. Keep in mind that the life insurance portion must be funded or coverage will not be kept in force.
• You have the option to make flexible premium payments. You can pay a minimum payment, target payment, or maximum payment. You can also adjust the life insurance coverage amount, though some increases in face value may require additional underwriting.
• Cash value can build up while deferring taxes. You need to consult with a financial professional to learn about the many tax advantages of universal life but, of course, death benefits are usually tax free to your beneficiaries.

Who Buys Universal Life Insurance?

People who want to combine a tax deferred savings vehicle with permanent life insurance should consider universal life insurance. Make sure you understand the positives and negatives of your policy, and make sure you know how your policy will handle a year when your market index is negative. Some have a guaranteed return so you will never lose cash value, but you need to make sure.

No matter what type of life insurance you buy, you can compare life insurance quotes and plans with our safe, fast, and free quoting forms!

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