Reader’s Question:

Is it even practical to buy life insurance for a senior citizen? How does it work?

Jacqueline

Crawford NE

Before you purchase an elderly life insurance, you should ask yourself why you want to have one. Determine first whether you need the insurance or not. For example, if you are part of an old couple with a fixed income from investments that could be enough to finance your dependents if you die, then you do not need such life insurance. Your death will not harm the financial stability of your loved ones.

Practically, a life insurance will serve as your financial protection for your dependents when you die. The death benefits your dependents will receive from your life insurance when you die will act as a replacement of your income when you were still living.

Insurance companies offering elderly life insurance may charge you with a higher rate than the normal life insurance. As the person gets older, the more the insurance companies believe that they will have greater risk in offering you the insurance coverage. Thus, they will be charging you a higher rate for your life insurance. In addition, since an elderly life insurance is guaranteed, you will not be undergoing a medical exam in order to have this type of insurance. You won’t be denied regardless of your medical history and health condition. This gives more reason why insurance companies offer this kind of life insurance at higher rate.

There are basically two types of life insurance: term or whole. A term life insurance, which offers purely insurance coverage, will provide you with an insurance coverage for a certain period of time while whole life insurance gives you permanent insurance and with added investment income. For elderly people, purchasing a term insurance is a more practical approach. On the other hand, a whole life insurance may be useless for the elderly because, compared to the younger ones, there will be less time for the elderly to see their investment grow.