Life Insurance Guides

We try to make features out of the topics that our readers find most engaging. One topic that has always been popular here is the subject of finding affordable life insurance for older people. This could mean midlife policies for people in their 50s or early 60s, retirement life for those turning 65, or even life insurance for the elderly for those in their 70′s and 80′s.

With that in mind, we are creating an over 50 Life Insurance Guide with some of the most popular topics expanded upon and explained. We have just begun with a couple of topics, but hope to keep adding information from experts in the field.

There are a variety of topics we hope to cover. These include the differences between types of life policies, which may suit people with specific financial goals. and how to find affordable rates, even if the applicants are older or have certain health conditions.  Other topics may include uses for policies, beyond just providing a death benefit, information about life settlements, and the differences between annuities and life insurance.  As we get more feedback, we will try to attack each subject with its own simple guide.

What Would You Like to Know About Life Insurance?

We would certainly like your feedback too! This helps us provide the information that our readers really are looking for. If you would like, you can always register for free, and then add your comments. We do moderate comments for new users, but we love to publish real feedback!

You can also ask questions or start a discussion on our forums. They are getting very active now, and many members find this exchange of ideas very helpful. While we never pretend to replace the services of a local expert, sometimes it can be very hard to even know where to start looking for information. We’d love to be the springboard for our community.

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This can be an unpleasant topic to bring up, or even to think about. But many of us do not think that planning for funerals and other final expenses means we are insensitive. In my experience, many older people are actually proud and cooperative when they are part of this process. These people have been financially responsible their whole lives, and they feel satisfied that they can continue to do this even after they pass away.

Costs of Final Expenses

Final expense is a term used to refer to those costs that come up after a loved one passes away. Consider some common costs.

• Funeral and Burial – It is not easy to find exact figures on this, but I can estimate that an average funeral and burial in the US will cost $8,000 – $10,000 or more. It can be difficult, or impossible, for many seniors to set aside money for this. And it can also be a financial strain on families.
• Lost Time From Work – Many people will probably have to take time off of work. Not everybody will be compensated for this.
• Travel and Accomodations – Some friends and family may have to travel. This means they will have to pay for transportation, housing, and meals. Local host families may have to help provide meals and beds, or they may have to make arrangements at hotels. Some people may have to rent cars to ferry guests around.
• Settle Bills – After a death, a loved one may leave some bills behind. Their could be final payments for medical services, housing, or even cars.  Somebody will have to figure out how to deal with these.

Final Expense Insurance For Seniors

One common way to plan for final expenses is to purchase a senior life insurance policy. These are also called final expense or funeral insurance. They are actually whole life insurance policies with a smaller face value ($2,500 – $25,000). They are designed to be simple for seniors to apply for, and they are specifically marketed to people in middle age through retirement years.

Who Pays for Final Expense Insurance?

Sometimes an older person will buy the policy on themselves. This means they will be the insured person and owner of the policy. They may name a grown child, or other family member, as the beneficiary so that person will have the cash to plan for the burial, funeral, etc. Sometimes that grown child or other loved one will actually purchase the policy and be the beneficiary and owner. This is not because that person wants to profit from the death of a loved one, but just so they will be sure and have cash to tide them through a tough time!

Shop Around For Final Expense Policies

Please do not purchase the first policy you see advertised on TV! As with any other insurance, all companies and policies are not the same! For one thing you should be sure and know the difference between simplified and guaranteed issue life insurance  policies. You can get a better deal and save money by purchasing the right one!

Since most things to do with insurance are local, you can get final expense insurance quotes in your own zip code with a fast insurance quote form.  Not every family needs a policy like this. Some have a fund set up to handle these costs. But for many middle class people, or for seniors living on fixed incomes, these policies can be an affordable way to plan.

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What is Single Premium Life Insurance, which is also sometimes just called SPLI? Instead of making payments over a period of years, you actually fund this type of policy with one large sum at the beginning for the contract. We are used to paying premiums once a month, or once a year, over many years. In this case, you just pay once, and then you are done. You can also get more information here: Single Premium Life Insurance Explained.

Who Should Consider SPLI?

There are some advantages to buying a whole life policy this way. You can just make one large payment, and then know you will be covered for the rest of your life. And if you happen to have a lump sum of cash, you can usually purchase many times that amount of face value. So one type of person who should consider this product would have some cash they do not need to spend, and who would like to turn that sum into a larger sum to pass on to heirs.

Estate Transfer Example

Consider the example of a retired person who received $20,000 as a lump sum paymet from an investment account. Since this individual also has a pension, other savings, and social security, they are sure they will not need to spend this money in the near future. Let us say for this example, that individual could purchase a $100,000 single premium life policy. So they could take the $20k, and they could be assured that if they can leave it alone, they will be able to pass on a much bigger estate to their spouse or children.

Single Premium Life vs Annuties

This may seem similar to some annuities that allow the owners to leave the cash value to beneficiaries. But there are some differences. With an annuity, the money will grow at the rate the contract allows. This could be a fixed interest rate or some market index. But there is no way that annuity will grow to many times the lump sum right away. With SPLI, the death benefit should be quite a bit larger than the premium payment right away.

Single Premium Life Disadvantages

Policies differ, and you must compare them to find the one that is best for you. But here are some typical things to consider before purchasing one.

• Fees or Surrender Charges – Just after your purchase your policy, your cash value will be less than your investment. These are good for people who are sure they can leave the money alone for awhile.
• MEC Status – The IRS considers SPLI as Modified Endowment Contracts, and you may not get all of the tax benefits you do from a normal life policy.
• You need a fairly large amount of money – It may be more affordable for many people to purchase normal life insurance and just make monthly, quarterly, or yearly payments.
• Underwriting – Even though many insurance companies accept older people who are not in perfect health, they will probably require some sort of health application.

Advantages of SPLI

Here are some of the main reasons why many peope are turning to single premium life.

• Cash Value – It should grow fairly quickly since you have funded the policy with a lump sum. This cash value can be borrowed against, though that may reduce the death benefit. You can also surrender your policy for the cash if you need it. Again, this really only works out well if you have held the policy for a few years. Check the terms of any policies you are considering.
• Accelerated Death Benefit – Look at the terms of your specific contract, but you should have a provision for cashing in a large percentage of the death benefit if the insured person is terminally ill.
• Large Death Benefit – You have the opportunity to multiple the cash you have in order to pass it on to your heirs as an estate.. This could be your spouse, children, grandchildren, or a favorite charity.
• Simplified Underwriting – This is still life insurance, and their could be underwriting. But because the policy is being funded by a large, upfront payment, many insurers will accept applicants up to age 80.

How Much Does Single Premium Life Insurance Cost?

Like any other policy, your cost will depend upon more than one thing. Your age and health, the size of the policy you want, and other factors will matter.  You can get free life insurace quotes or find a qualified local agent here: Senior Life Insurance Quotes.  

Don’t worry – in life insurance terms, senior usually means over 50!

More Information:

I think this article is helpful – Single Premium Life vs Immediate Annuities

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Related: No Medical Exam Life Insurance For Seniors

You probably heard the same thing I did. Term life insurance policies are for younger people who need to cover their home mortgages and family members who depend upon their incomes. They are affordable, because they are pure life insurance. The rest of your money should be used to invest in higher paying savings vehicles. LOL – if you survived 2008, you may be wonder what those high paying savings vehicles are. I have no idea.

And the problem is, 10, 20, or 30 years passed, and we found that our coverage had expired, but our need for coverage did not magically vanish! We still owed money on our homes because we had purchased a new house or refinanced the old one. Our kids did not follow our schedules. In fact, many of us have our kids and our kid’s kids depending on us now!

Now for the Good News!

But I have good news! Statistics show that Americans are living longer and healthier lives so Insurers are willing to extend insurance to older people at very affordable rates. You can find no medical term life insurance and other over 50 life insurance options to provide security for your family.

Even if you already have a policy, it may still pay to get a life insurance quote. Here’s an example. If you got a $400,000 policy 10 years ago, but now you only need $200,000, you may be able to find a lower rate for the lower amount of coverage. The price difference may save you money that you need now, and that is taking into account the fact your are 10 years older!

Why Do Older People Buy Life Insurance?

• Provide a tax free cash payment to people who depend upon you.
• Provide money for funerals and other final expenses.
• Transfer wealth.
• Protect a business in case an owner or key employee passes away.
• Settle with other surviving members in case one heir will get the business after the current owner dies.

Now insurance rates are local, and you will need to get competive rates in your zip code. We did find price differences between top insurers for the same individual. Go here: Best Life Insurance Quotes Online.

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