Purchasing a life insurance policy in your senior years is challenging but definitely possible even after 90 years. However, there are many obstacles in your way that younger people don’t have to face.
The entire life insurance industry seems to favor young customers over seniors. This begs the question, “Is life insurance for seniors a worthwhile purchase?”
What Obstacles Do Seniors Face?
Due to old age, and all the “side effects” that come with it, seniors have conditions that make them high risks for insurers.
What does this mean?
Life insurance companies categorize their clients based on their risk of dying earlier. These high-risk people are considered an increased risk to insure due to many factors.
These factors include, but are not limited to:
- Health condition
- Smoking habits
- Financial status
For seniors, their age and deteriorating health condition alone make them riskier to insure than other age groups.
Add to that the fact that most seniors don’t have a source of income aside from their pension and savings – insurers are just not sure that seniors can pay for their life insurance premiums enough so that the company doesn’t waste their money on the death benefit.
From a purely business perspective, seniors are more of a liability than assets in the eyes of insurance companies.
Why You Need Life Insurance
These insurance carriers don’t tell you, though, that there are many good reasons why seniors should purchase a life insurance policy.
The myth that seniors don’t need life insurance is just that, a myth. They have as much, if not greater, need for financial coverage.
Life Expectancy is Growing
The average life expectancy in the United States today is around 79 years. From the year 2020, there was a 0.08% increase, where life expectancy was 78.93 years.
From 2019 to 2020 life expectancy had an increase of 0.08%. The same trend is found from 2018 to 2019.
This small trend can be traced back as far as 1950. That year, life expectancy in the United States was just over 69 years.
What do these numbers mean? It means seniors have more years in their lives than they might expect. Some decades back, seniors only had to plan their savings and pension to last a few years after retirement. Today, that’s just not the case.
As a senior, you have to make your savings and pension last for more than ten years than the previous generations did. Some seniors manage this by delaying their retirement, but not everyone has the health to do the same.
For older people who are worried if they have enough savings or sources of income to cover the rest of their lives, a good life insurance policy is a beneficial financial backup plan.
It’s no secret that healthcare in the United States is expensive. And that’s a shame, especially for seniors who tend to suffer more degenerative diseases.
Medical debt is the number one cause of bankruptcy in the United States, causing as much as 62% of reported bankruptcies.
In 2011, researchers Matthew Notowidigbo and Tal Gross discovered that 26% of bankruptcies are heavily influenced by out-of-pocket medical costs.
Furthermore, Debt.org reported that 20% of people filing for bankruptcy are aged 55 and older. Even with the help of Medicare, a 65-year-old couple of average means will face $275,000 in medical bills throughout their retirement years.
Again, you have to ask the question. With years still ahead of you, and the potential medical bills you’re facing, is your savings enough to last you your retirement years?
Senior Life Insurance is a Worthwhile Purchase
We’ve only covered two main reasons why you need a financial cushion in your twilight years. Now let’s see how life insurance can give you that financial security.
Offer Cash Value
Life insurance policies like whole, universal, and variable life insurance policies have a savings component. This savings component comes in the form of cash value. What does this mean?
When you pay your premiums, the payment is towards two things – the policy and the cash value.
Cash value is money you can borrow against when you need it (the rules of borrowing against cash value differ among policies or insurers). The cash value allows you to have a source of emergency funds.
However, borrowing against your policy’s cash value affects your deal with the insurance company. The death benefit of the policy decreases or, if you borrowed too much, the policy loses its effect altogether.
Different types of life insurance policies have different forms of cash value. For a whole life policy, the cash value earns via a fixed interest.
For a variable life policy, you invest your money into the market – the growth of your funds is determined by how good the investments are.
A universal life policy bases its cash value growth on either the market or the minimum interest rate.
May NOT Require a Medical Exam
There are insurance policy types that don’t require you to pass a medical exam. This works great for people with serious medical conditions but needs coverage.
These types of insurance policies are called guaranteed acceptance life insurance. One such type is burial insurance (also called final expense life insurance).
It is designed to help the policyholder cover the final expenses in his life. Final expenses include burial, medical bills, or paying debt left by the deceased.
How to Reach this Senior Market
Now that we’ve established the need, the next step is how to reach these clients. Direct mail is one way, but that takes months to get going and can produce expensive or inconsistent results. If you do telesales or set local appointments, the best method is to buy final expense insurance leads on a regular basis. Make sure they’re exclusive leads, with recordings and address data. Call the leads, set appointments, or sign them up with insurance over the phone. Now that you have a roadmap, it’s time to help some seniors!
Protects You and Your Family
Life insurance protects you financially. And it protects the financial legacy you will leave to your family.
It provides you with a financial safety net while you’re living. And it protects your family from unpaid debt in case of an untimely death on your part.
And the good thing is, if you’re just patient enough, you can purchase a life insurance policy that fits all your needs without costing you a liver and a limb. This is truly the life insurance worth purchasing as a senior.