Why is life insurance important for seniors?
Older Canadians buy life insurance for a variety of reasons. Some want to ensure their family and loved ones are looked after when they pass away. It can be particularly important to have life insurance coverage if you have dependents or children with special needs. With insurance, you’ll have peace of mind knowing they will be taken care of financially after you’re gone.
Other seniors get insurance policies to help pay for their funerals and other final expenses. Life insurance is a good way to cover any costs for your burial or estate expenses that could take away from the inheritance you want to leave your family. The death benefits paid out by insurance companies are tax-free, so you’re loved ones won’t need to worry.
And some seniors want to offer some financial support to charities that are close to their hearts. If you were a significant contributor to a favourite cause, your passing could put them at financial risk. With an insurance policy, you’ll be able to appoint the charity as the beneficiary. That means they will get the payout when you pass away so they continue their good work.
Whatever your reasons are for wanting life insurance, it is a wise investment. There are no wrong reasons for wanting insurance when you’re a senior.
Types of life insurance coverage for seniors
Term life insurance
Term life insurance provides temporary coverage for a period of time. However, it’s not the best option for seniors because of the cost of premiums. For example, if you buy term life insurance when you’re in your 60s and your policy is only good for 10 or 20 years, if you want to renew your coverage when it expires, you’ll be paying very high rates.
Remember that the cost of insurance premiums goes up as you get older. So, in our example, if you wanted to renew your policy at 70 or 80 years, the premiums could be higher than other types of insurance.
No-medical life insurance
One of the things that can make seniors reluctant about buying life insurance is the medical exam. But there are no-medical life insurance policies that do not require you to undergo a medical exam to qualify. Rather, the company may have a health survey they use to collect information about your medical history and current health status.
Simplified life insurance
This type of insurance can be attractive to seniors as there is no medical exam required. Instead, you’ll ask some simple health questions about your medical history and lifestyle. However, the downside is that your premiums will be higher.
Life insurance companies may also have a waiting period of up to two years before your coverage begins. That means if you pass away in those two years of any medical issues, your beneficiaries will not receive the death benefit. This does not apply to accidental deaths. In the case of accidental death, your beneficiaries will receive the death benefit.
Permanent life insurance
Permanent life insurance plans for seniors offer an investment opportunity that can help you pay for future costs. It is a good insurance plan for those in their 50s or early 60s who still have some time to save up a significant amount of money. You’ll be able to use the cash value of your policy to support you during retirement. Alternatively, the funds can be added to the death benefit that is paid out to your beneficiaries.
Guaranteed life insurance
Guaranteed life insurance policies will provide coverage for you regardless of your medical history or any current health problems. This insurance plan does not require you to take a medical exam or answer any health questions to qualify.
However, as with simplified life insurance, your life insurance premiums will be higher. The other drawbacks to guaranteed life insurance are the waiting period of up to two years and a limited death benefit amount.
Types of life insurance coverage for seniors
Factors that affect life insurance rates for seniors
Age
With life insurance, the rule is usually the older you are the higher the premiums. This is because life insurance companies know they will be paying out a death benefit to your loved ones. And the more likely it is they will need to pay that out, the more they charge you for their products. While this may seem unfair, if insurance companies paid out more than they earned with premiums, they’d soon be out of business.
Pre-existing conditions
A pre-existing health condition does not exclude you from purchasing life insurance. Many life insurance providers will still offer insurance to seniors with pre-existing conditions. However, you may need to prove that you’re in good health and that your condition is not life-threatening. If this is the case and you manage your health well, you’ll be able to qualify for regular life insurance premium rates. If your condition is more serious, you can still get life insurance but the premiums may be higher.
Coverage
Your life insurance coverage refers to the amount your beneficiaries will receive when you pass away. The general rule is the more coverage you buy, the higher your premiums.
Smoking
Life insurance is always more expensive for smokers because they are riskier to ensure. However, if you quit smoking, you’ll be able to reduce the cost of your life insurance plan.
Why Maple Bay?
At Maple Bay, we pride ourselves on our customer service. We understand that buying life insurance when you’re a little older can be intimidating. You don’t want to be turned down and you don’t want to end up paying the highest premium. Our brokers are committed to getting you the best life insurance policy for your situation and budget.
We have over 200 years of collective experience in the insurance industry. We know what life insurance products are available and who they are best suited for. If you’re looking for the most affordable life insurance for seniors, we can help.
Contact one of our Maple Bay insurance specialists to find the right seniors life insurance policy for you.