Life insurance can be useful at any age, and whole life insurance for seniors can provide valuable benefits even late in life. You might want coverage to pay off debt, provide for a spouse or other loved ones, or leave a legacy for future generations.
Whole life insurance can be an effective way to ensure that beneficiaries receive a death benefit. Even if your medical history complicates matters, it's likely that there are still policies available to you.
What Is Whole Life Insurance?
Whole life insurance is a form of permanent insurance, which means a policy can stay in-force even if you live beyond age 100. These policies also provide a cash value from which you could draw, although doing so might cause your coverage to end. Two of the most appealing features of whole life are the so-called "permanent" coverage and the fact that premiums remain level during the life of the policy.
When Does Whole Life Insurance Make Sense?
Whole life insurance for seniors can make sense in several situations. If you want to ensure that a policy remains active through an advanced age, a whole life policy offering long-term coverage may be a good fit. In contrast to term life policies, which typically end after a certain number of years, whole life insurance policies are considered "permanent" as long as you continue to pay the required premiums.
The premiums and cash value on a whole life policy are also predictable, which can make financial planning easier. You will know upfront exactly how much you will pay, and your cash value will be guaranteed as long as you follow the payment schedule.
Whole life insurance policies have a cash value that can gradually increase as you pay premiums. If you need to use that asset later, you have the option of withdrawing money from the policy or borrowing against the cash value. Using those funds could cause your policy to lapse, but the option is there in case you need it.
What to Look for in Whole Life Policies
Sometimes, whole life insurance for seniors includes a waiting period. These policies might not pay out a death benefit if you die within two years — though exceptions may exist. Instead, the policy might refund your money, potentially with some additional earnings. If you need a large death benefit, be mindful of waiting periods.
In addition, depending on your age, different insurers might limit how much death benefit you can buy. If you find that you're not getting the coverage you need, ask an agent which carriers might be the best fit for your goals.
There is also the question of your health, as insurers often review this point when they evaluate your application. Those reviews might include health questions, and you might also need to see a paramed who takes blood and urine samples. If you have health issues, discuss them with an insurance agent before you apply. Note that a denial in your history can cause complications.
If you have health issues, you might be able to qualify for what's know as a simplified issue policy. These policies may feature an abbreviated questionnaire, which can make it easier to meet the insurance company's requirements. In addition, guaranteed issue policies can improve your chances even more. However, you typically pay the lowest premiums when you undergo a full medical review, so guaranteed issue policies aren't right for everybody.
Is Whole Life Insurance Right for You?
Life insurance can help you protect loved ones and may provide assets that you can use throughout life. If you need a policy that lasts through old age, a whole life insurance policy might be a good solution. To explore your options, start by discussing your needs and any health conditions you might have with an insurance professional. Then, complete your application, submit it to the insurer of your choosing, and wait for them to review your request. You will likely have several options from which to choose, so be sure to pick the one that works best for you and your family.