If you are in retirement age and think that it is too late for insurance, think again. Over 50 life insurance exists. You can still use insurance to leave lasting legacy or funeral funds. Many insurance companies offer products with an issue age up to 85 y.o. The discrepancies in the amount you pay as a premium are much larger for seniors than for younger applicants.
The small print in policies is becoming more important with age as well. It is important to trust your search to an experienced independent insurance provider in Canada. Our team has over 30 years of experience, and will be happy to find you the right fit in the sea of life insurance product offerings.
What is to look out for when considering life insurance for seniors?
Insurability
Whether you are eligible depends on an initial screening process that considers factors like health, age, gender and history of prior claims. If you are unsure if you qualify, find out what information is needed by asking broker to submitting a preliminary inquiry.
There is a variety of guaranteed issue products on the market that don’t require medical exams. However, that doesn’t always mean they will cover pre-existing conditions. One should be extra diligent when considering the non-medical insurance, because some of them will have limited coverage and specific death benefit exclusions.
Policy purpose
The end goal of insurance will largely determine the amount of death benefit, the type of product you should choose and premiums you will pay. If you are looking to leave a little money to cover funeral expenses you can consider term to perm option and save some money upfront. Note that insurance companies will have different minimum benefit limitations: some may be only $10,000 where others $50,000. With term to perm option you should be careful to consider the maximum age for conversion, it usually varies from 69 to 85.
If estate planning is your goal, permanent (universal or whole life) policy will be more suitable. They will allocate portion of your premium to tax-deferred investment account and can produce significant return, depending on the amount you put in, product type and investment portfolio. When considering permanent life insurance for elderly we would advise guaranteed premium products that protect you from rising premiums as cost of insurance goes up with age. One of the benefits of choosing permanent life insurance is that it gives you an edge over inflation, insuring that the value of a nest you wish to leave for your heirs won’t be eradicated. Keep in mind that regardless of the type of insurance product death benefit goes to the beneficiary/ies directly, outside of the estate and therefore it is not subjected to estate taxes.
Deferred payout
If you are looking into life insurance for estate planning, check out “last to die” policies. These policies offer much lower premiums as the death benefit is paid out on the passing of the second spouse.
Cash options
Policy options allowing to withdraw a portion of policy’s value or take a loan against it are important for seniors to consider. Some policies will also have living benefits addons allowing for withdrawals in case of disability or critical illness.
For seniors at risk of health complications these are crucial. These riders can be used to cover treatments, medical care, and assisted living: costs that would normally be a heavy burden on the insured or their family. Keep in mind that any withdrawals during the life of insured will reduce the total death benefit.
There is plenty details to consider when purchasing life insurance, especially life insurance for elderly. Contact our expert team for a free consultation and quote.