What Kind of Life Insurance is Best for Seniors?
Life insurance is a trusted way of ensuring that your loved ones are taken care of after you have passed. There are a multitude of policies available today, each offering distinct benefits. However, finding the policy that suits you best can be a challenging task. Senior citizens, in particular, have their work cut out for them because they have little margin for error.
It is important to be aware of one’s financial and family situation, which determines the type of coverage that is needed. With medical care becoming more expensive by the day, it is mandatory to have a Medicare plan to ease the expenses for you and your family.
Medicare plans
Medicare originally provided two basic plans, Part A and Part B. Part A provides hospital insurance, which consists of in-patient stays, nursing care, and limited home care. Part B, on the other hand, covers doctor visits, medical supplies, outpatient procedures, and certain preventive screenings.
You can qualify for premium-free Part A through your employment or by paying Medicare taxes for a period of ten years. If not, Part A can be purchased for $274–499 per month. Part B is usually taken up at the same time in order to avoid paying a penalty. It costs $171 per month or more based on your income. Medicare Advantage, or Part C, offers similar benefits as Parts A and B through private insurance companies and money lenders registered under Medicare. They also provide Part D which offers drug coverage that is otherwise taken up by paying an additional premium based on your annual income.
Types of Insurance
The reason you are looking for insurance will determine the amount and the period of coverage. Marital status, family size, health conditions, any outstanding debts or mortgages, etc. are a few factors to take into account. If your family is financially secure, you can concentrate your insurance coverage on any unanticipated medical costs or mortgage repayment.
Term insurance is generally not preferred for seniors, as there is no cover if the holder outlives the mentioned age. Whole life insurance is a better option, as it provides coverage regardless of when the policyholder passes, as long as the premiums are paid on time. Any unpaid loan amount at the time of death will be deducted from the benefit.
Guaranteed universal life insurance, which reduces payments or occasionally skips them with insignificant reductions in the benefit, is another adaptable choice. This is a good option for those who already have health issues because term insurance may not be an option for them.
Final Expense Insurance
Also known as burial insurance or funeral insurance, this is an addition to or a component of whole life insurance. Typical policies provide amounts ranging from $5000–10000 with affordable monthly premiums. Generally, this is taken up when people start approaching retirement. However, most insurance companies offer coverage from the age of 50 up to 85.
Over the years, funeral costs have exploded, with a basic funeral costing up to $8000 as recently as 2021. Purchasing burial insurance will help cover the funeral costs at a time when the family is grieving. Though the purpose is self-explanatory, the beneficiaries have complete control over how the money is spent. Unless the person has pre-existing medical conditions or uses tobacco, these policies have affordable premiums (monthly or yearly). A medical examination is not usually required, and it gives you a guaranteed death benefit as long as premiums are paid on time. Further, death benefits are not taxable for the beneficiaries.
What to Look Out for While Choosing an Insurance Policy?
Every insurance company offers multiple policies for senior citizens. Each policy has some benefits and some options that others may not offer. It is important to know that there is no one policy that covers everything. The policy we choose is dependent upon the need, situation, and health condition at the time of enrolment. However, there are certain key factors that are often considered before coming to a decision.
A quick payout is a very attractive feature in an insurance policy. It prevents the hassle one has to undergo, which includes filling out multiple forms and pending clearances. Fast and easy benefit settlements reduce stress during difficult times. Specific to final expense insurance, a no-waiting-period clause is extremely useful as it helps cover funeral expenses. It gives the family one less thing to worry about amidst the grieving. The approval process is fast, and full coverage is available from the first day.
In general, everybody prefers a simple and convenient application procedure and for the process to be completed quickly with the minimum hassle.
What Not to Do When Looking For Life Insurance
As much as being aware of what you need is important, it is also crucial to know what to avoid or take a second to reconsider. Certain policies might look attractive at the outset, but they always have a second clause that causes them to fall short of the promised benefits.
The first and foremost rule is to not rush into a purchase. Many companies and private insurance providers often rush you into acceptance by offering unnecessary coverage or apparent extra benefits. It is always prudent to consult with a family member or a trusted advisor. Always ask for detailed expense pages that show disclosure costs year-by-year and other important information that may be relevant.
Another common mistake is giving maximum weight or importance to the cost. Careful consideration should be given to the existing financial condition and the reason for buying an insurance policy. A high-cost policy without medical benefits will not help in the event of an unforeseen hospitalization or surgery.
On the other hand, a policy that costs less and includes final expenses will ease the burden on the grieving family. The graded death benefit is tricky and should be avoided, as you will want your insurance to kick in from day one. With a graded death benefit policy, the full death benefit cannot be accessed from a non-accident cause within the first two or three years of holding the policy. This defeats the very purpose of having a policy in the first place.
Everyone’s situation and health are different, so it is very important to find the right coverage that fits you. Getting the right insurance coverage is extremely crucial, especially for senior citizens. It is vital to get a reliable broker who has in-depth knowledge about a wide variety of plans so that the ideal coverage that suits your requirements the best can be provided. At DeverCare Medicare Solutions, we help you get the best health insurance through our expert brokers. Not only that, but we check in with you throughout the year as well as during enrollment periods to ensure you are satisfied with your coverage. We are there for you when you need us, whether that’s answering questions or calling the insurance companies to review your claims and costs. Contact us today!
